Question: Logan, Inc. is considering the purchase of a warehouse directly across the street from its manufacturing plant. Logan currently warehouses its inventory in a public warehouse across town. Rent on the warehouse and delivering and picking up inventory cost Logan $48,000 per year. the building will cost Logan $400,000. Logan will depreciate the building for 20 years. At the end of 20 years, the building will have a $125,000 salvage value. Braxton's required rate of return is 10%. the building's net present value is
a. $41, 347
b. $27, 228
c. $427, 228
d. $960,000