An existing company has to increase its manufacturing facilities in order to kee

An existing
company has to increase its manufacturing facilities in order to keep their
market share.One alternative is to
expand the present plant.If this is
done the expansion will cost $500000.
In addition labor costs will increase by $300000 per year while
additional costs for overhead depreciation taxes and insurance would be
$250000 per year.A second facility requires
construction and operation of new facilities at a location about 100 km. from
the present plant.At the new location
cheaper labor would be available.The
new facilities would cost $700000.The
labor cost would be 200000 per year while overhead depreciation taxes and
insurance would total up to $300000.If
the minimum rate of return on investment is 20% determine the minimum service
life for which the facilities at the distant location would be profitable.Do not take depreciable life and service life
to be the same.