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20 pts Arnold Enterprises is evaluating alternative uses for a three story manufacturing and warehousing building that it has purchased for 850000 The company 0can continue to rent the building

20 pts Arnold Enterprises is evaluating alternative uses for a three story manufacturing and warehousing building that it has purchased for 850000 The company 0can continue to rent the building

 (20 pts) Arnold Enterprises is evaluating alternative uses for a three-story manufacturing and warehousing building that it has purchased for $850,000. The company can continue to rent the building to the present occupants for $36,000 per year. The present occupants have indicated an interest in staying in the building for at least another 15 years. Alternatively, the company could modify the existing structure to use for its own manufacturing and warehousing needs. Arnold's production engineer feels the building could be adapted to handle one new product line. The cost and revenue data for the product line are as follows: Initial cash outlay for building modifications Initial building outlay for equipment Annual pretax revenues (generated for 15 years) Annual pretax expenditures (generated for 15 years) Product line $65,000 $205,000- $165,000- $75,000

 
mahesh 17-Mar-2020

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