Answer Happy

Problem 8-6 (Algo) A firm that has recently experienced an enormous growth rate is seeking to lease a small plant in Memphis, TN; Biloxi, MS; or Birmingham, AL. Prepare an economic analysis of the three locations given the following information: Annual costs for building, equipment, and administration would be $60,000 for Memphis, $70,000 for Biloxi, and $105,000 for Birmingham. Labor and materials are expected to be $8 per unit in Memphis, $5 per unit in Biloxi, and $5 per unit in Birmingham. The Memphis location would increase system transportation costs by $59,000 per year, the Biloxi location by $69,500 per year, and the Birmingham location by $25,500 per year. Expected annual volume is 14,500 units. Total Cost Memphis Biloxi Birmingham