A firm is considering moving its manufacturing plant from Chicago to a new location. The industrial engineering department was asked to identify the various alternatives together with the costs to relocate the plant and the benefits. The engineers examined six likely sites, together with the do-nothing alternatives of keeping the plant at its present location. Their findings are summarized as follows: Plant Location First Cost ($000s) Uniform Annual Benefit($000s) Denver $300 $52 Dallas 550 137 San Antonio 450 117 Los Angeles 750 167Cleveland 150 18Atlanta 200 49Chicago 0 0The annual benefits are expected to be constant over the 8-year analysis period. Required:(a) Construct a choice table for interest rates from 0% to 100%.(b) IT the firm uses a 10% annual interest in its economic analysis, where should the manufacturing plant be located. Use MARR=15%, and only use Excel to check your results.
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![NPV=-I_0+CF[\frac{1-(1+i)^{-8})}{i}]=-I_0+CF\cdot A](/tpl/images/0582/3858/f7fda.png)
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A firm is considering moving its manufacturing plant from Chicago to a new location. The industrial...
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