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Should the company purchase the new warehouse

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Net Present Value Analysis and Qualitative Factors, Alternative Format. Pete's Plumbing Supplies would like to expand into a new warehouse at a cost of $500,000. The warehouse is expected to have a life of 20 years, and a salvage value of $100,000. Annual costs for maintenance, insurance, and other cash expenses will total $60,000. Annual net cash receipts resulting from this expansion are predicted to be $115,000.

The Required:

Question 1: Find the net present value of this investment using the format presented in . Round to the nearest dollar.

Question 2:  Should the company purchase the new warehouse? Explain.

Question 3: Provide one qualitative factor that might cause the company to reach a different conclusion than the one reached in requirement

Reference no: EM132507931

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