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Building B: Lease for 2 5 years with annual lease payments of $ 7 2 , 0 0 0 being made at the beginning of

 

Building B: Lease for 25 years with annual lease payments of $72,000 being made at the beginning of the year.

Building C: Purchase for $681,000 cash. This building is larger than needed; however, the excess space can be sublet for 25 years at a net annual rental of $6,700. Rental payments will be received at the end of each year. Larkspur has no aversion to being a landlord.

Click here to view Table A.4 - PRESENT VALUE OF AN ORDINARY ANNUITY OF 1

Click here to view Table A.5 - PRESENT VALUE OF AN ANNUITY DUE OF 1

Calculate the net present value of three buildings, assuming a 12% cost of funds. (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round final answers to 0 decimal places, e.g. 5,275.)

 

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