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Ayayai Inc., manufactures ice tea and would like to increase its market share in the North. In order to do so, Ayayai has decided

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Ayayai Inc., manufactures ice tea and would like to increase its market share in the North. In order to do so, Ayayai has decided to locate a new factory in the Cedar Rapid area. Ayayai 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 buildings: Building A: Purchase for a cash price of $1,538,000, useful life 28 years. Building B: Lease for 28 years with annual lease payments of $125,000 being made at the beginning of the year. Building C: Purchase for $1,980,000 cash. This building is larger than needed; however, the excess space can be sublet for 28 years at a net annual rental of $20,600. Rental payments will be received at the end of each year. Ayayai Inc. has no aversion to being a landlord. Click here to view factor tables In which building would you recommend that Ayayai Inc. locate, assuming a 12% cost of funds? (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 2 decimal places, e.g. 4,585.81.) Building A Building B. $ Building C $ Net Present Value Ayayai Inc. would locate in 1,538,000

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