Question

The Metlock Inc, a manufacturer of low-sugar, low-sodium, low-cholesterol TV dinners, would like to increase its market share in the Sunbelt. In order to do so, Metlock has decided to locate a new factory in the Panama City area. Metlock will either buy or lease a site depending upon which is more advantageous. The site location committee has narrowed down the available sites to the following three very similar buildings that will meet their needs Building A: Purchase for a cash price of $617,800, useful life 26 years. Building B: Lease for 26 years with annual lease payments of $71,870 being made at the beginning of the year. Building C: Purchase for $650,400 cash. This building is larger than needed; however, the excess space can be sublet for 26 years at a net annual rental of $6,980. Rental payments will be received at the end of each year. The Metlock Inc. has no aversion to being a landlord. In which building would you recommend that The Metock Inc. iocate, assuming a 10% cost or funds? (Round factor values to S deema,places eg. I2S24 and final answer to O decimal places, e.g. 458,581.) Net Present Value Building A Building 8 Building C $ The Metlock Inc. should locate itself in [

Answer 1