Al-Dana Resorts are considering marketing their services and properties through a permanent exhibition centre. A1-Dana can construct the exhibition center or rent a hall. The construction option costs initially BD175,000 with BD2,000 annual maintenance cost. The center needs to be redecorated every 3 years at a cost of BD10,000 starting after 5 years from now. The rental option will cover all aspects of maintenance and redecoration of the center through an annual rental payment of BD25,000 with rent renewal charges of BD4,000 every 6 years. At an interest rate of 10% per year compounded quarterly, determine:
Which option do you recommend A1-Dana Resorts to choose? Why?
Interpret your answer?