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Concord Inc., manufactures ice tea and would like to increase its market share in the North. In order to do so , Concord has decided
Concord Inc., manufactures ice tea and would like to increase its market share in the North. In order to do so Concord has decided to
locate a new factory in the Cedar Rapid area. Concord 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 $ useful life years.
Building B: Lease for years with annual lease payments of $ being made at the beginning of the year.
Building C: Purchase for $ cash. This building is larger than needed; however, the excess space can be sublet for years at a
net annual rental of $ Rental payments will be received at the end of each year. Concord Inc. has no aversion to being a
landlord.
Click here to view factor tables,
In which building would you recommend that Concord Inc. locate, assuming a cost of funds? Round factor values to decimal
places, eg and final answers to decimal places, eg
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