An oil company plans to purchase a piece of vacantland on
Chapter , Problem 8-33(choose chapter or problem)
An oil company plans to purchase a piece of vacantland on the corner of two busy streets for $70,000.On properties of this type, the company installsbusinesses of four different types.Plan CostType of BusinessA$ 75,000 Conventional gas station withservice facilities for lubrication,oil changes, etc.B230,000 Automatic carwash facility withgasoline pump island in frontC30,000 Discount gas station (no servicebays)D130,000 Gas station with low-cost,quick-carwash facilityImprovements cost does not include $70,000 for the land.In each case, the estimated useful life of theimprovements is 15 years. The salvage value foreach is estimated to be the $70,000 cost of the land.The net annual income, after paying all operatingexpenses, is projected as follows:Plan Net Annual IncomeA$23,300B44,300C10,000D27,500(a)Construct a choice table for interest rates from0% to 100%.(b)If the oil company expects a 10% rate of returnon its investments, which plan (if any) shouldbe selected?
Unfortunately, we don't have that question answered yet. But you can get it answered in just 5 hours by Logging in or Becoming a subscriber.
Becoming a subscriber
Or look for another answer