Amount Industrial Co. is a tool manufacturer (produces hand tools, pneumatic tool, etc.) To cater to its expanding business, the firm is planning to open a warehouse in Taipei. The Firm’ supply chain manager is considering a choice between two warehouse locations (Taipei City, and Hsinchu City). A lease at the Taipei location costs $1000 per month with a payment of $2000 up front to guarantee the 3 year lease. The Hsinchu City location would cost $1200 per month and would be leased from month to month. The anticipated revenue in either location is $1500 per month. The estimated rate of return is 20% per year. 

Calculate net present value at the Taipei City location?

Answer rating: 100% (QA)

To calculate the net present value NPV at the Taipei City location we need to determine the present ... View the full answer