Caterpillar Corporation wants to build a spare parts storage facility in the Phoenix, Arizona,
vicinity. A plant engineer has identified four different location options. The initial cost of earthwork
and prefab building and the annual net cash flow estimates are detailed in Table 8–5. The
annual net cash flow series vary due to differences in maintenance, labor costs, transportation
charges, etc. If the MARR is 10%, use incremental ROR analysis to select the one economically
best location.