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E 6 - 1 2 ( L 0 4 ) ( Analysis of Alternatives ) The Black Knights Inc., a manufacturer of low - sugar,
ELAnalysis of Alternatives The Black Knights Inc., a manufacturer of lowsugar, lowsodium, lowcholesterol TV dinners, would like to increase its market share in the Sunbelt. In order to do so Black Knights has decided to locate a new factory in the Panama City area. Black Knights 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 $ 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. The Black Knights Inc. has no aversion to being a landlord.
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