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1. On January 1, 2018, Central Perk Inc. ias decided to locate a new coffee bean factory in Ruidoso, NM, to increase its market share

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1. On January 1, 2018, Central Perk Inc. ias decided to locate a new coffee bean factory in Ruidoso, NM, to increase its market share in the Southwest. Central Perk Inc. will either buy or lease a site depending upon which is more advantageous, based solely on cost. The site location committee has narrowed down the available sites to the following 6 buildings Building A: Purchase today for a cash price of S500,000. Building B: Pay $122,500 immediately and lease for 6 years with annual lease payments of $80,000 being due at the end of each year. Building C: Lease for 14 years with annual lease payments of S56,250 being due at the beginning of each year. The first lease payment is due immediately. Building D: Purchase today for S585,000 cash. This building is larger than needed; however, the excess space can be sublet for 10 years at a net annual rental income of S13,650. Rental income payments will be received at the end of each year. Building E: Lease for 8 years with annual lease payments of $60,000 being due at the beginning of each year, with the first lease payment due immediately. Also, a balloon payment of $230,000 is due at the end of 8 years Building F: Lease for 12 years with annual lease payments of S77,750 due at the end of the year. The first lease payment is due December 31, 2019 Assuming an 8% cost of funds, which building would you recommend to Central Perk Inc.? You must show your calculations for each of the 6 building options and clearly state which building option you would choose and why. Base your choice solely on cost

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