Applegate Industries is planning to expand its production facility in a few years. New plant construction costs are estimated to be $4.50 per square foot. The company invests $850,000 today at 8% interest compounded quarterly.
a. How many square feet of new facility could be built after 31 years? Round to the nearest whole square foot.
b. If the company waits 5 years and construction costs increase to $5.25 per square foot, how many square feet could be built? Round to the nearest whole square foot. What do you recommend?