Question: Problem Statement: Quantum Logistics, Inc., a wholesale distributor, is considering the construction of a new warehouse to serve the southeastern geographic region near the Alabama-Georgia

  1. Problem Statement: Quantum Logistics, Inc., a wholesale distributor, is considering the construction of a new warehouse to serve the southeastern geographic region near the Alabama-Georgia border. There are three cities being considered. After site visits and a budget analysis, the expected income and costs associated with locating in each of the cities has been determined. The life of the warehouse is expected to be 12 years, and MARR is 12%/year.

City

Initial Cost

Net Annual Income

Lagrange

$990,000

$50,000

Auburn

$710,000

$155,000

Anniston

$850,000

$270,000

a. What is the annual worth of each site? (Round answers to the nearest dollar; tolerance is 2.00) b. What is the decision rule for determining the preferred site based on annual worth ranking? c. Which city should be recommended?

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