The XYZ Company Has a Choice Between Two Warehouses

question 80

Essay

The XYZ Company has a choice between two warehouses.A lease at location A costs $1000 per month with a payment of $2000 up front to guarantee the 3 year lease.Location B would cost $1200 per month and would be leased from month to month.The anticipated revenue in either location is $1500 per month.The estimated rate of return is 10% per year.Using net present value,determine which location would be the better choice.

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Definitions:

Perceptual Adaptation

The ability of the body to adjust to an environment by filtering out distractions.

Ponzo Illusion

A visual illusion where parallel lines seem to converge, affecting the perceived size of objects within those lines.

ESP

Extrasensory perception, a claimed ability to gain information through means other than the known human senses.

Fraudulent

Acts intentionally deceptive made for personal gain or to harm another individual.