Problem
SensLiving, Inc. plans to buy a new factory for its space toilet manufacturing. Given current interest rates, they feel they can afford about $4,000,000 for the factory. (to keep it simple, we'll assume the existing factory requires little refurb). Before purchasing an existing facility, they will explore the possibility of building. They can find a suitable lot for about $750,000-$900,000. At a minimum, they need a 10,000SF facility, with 7,000SF for high-tech manufacturing space and 3,000SF of office space. The office space building is about $200/SF, and the high-tech space is $500/SF.
• Should SensLiving pursue the option of building a new factory?