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Question: warehouse a with a life of 10 years can be...

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Warehouse A with a life of 10 years can be constructed now for $100,000, with no repair costs, and a salvage value of $10,000. Alternatively, Warehouse B with a life of 12 years can be constructed for $70,000 now with a salvage value of $5000, but it requires $18,000 worth of repairs every three years. Both have equal usefulness and are needed indefinitely. Assuminga 6% interest rate, which warehouse is a better deal, and by how much per year? Assume that prices will not change in the future. 6.

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