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Exercise 6-12 Novak Inc., manufacturer of low-sugar, low-sodium, low holesterol TV dinners, would like to rovase es market share in the Sunber. In order to

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Exercise 6-12 Novak Inc., manufacturer of low-sugar, low-sodium, low holesterol TV dinners, would like to rovase es market share in the Sunber. In order to do so, Novak has decided to locate a new tactory inth, Panama | area. Novak 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 foilowing three very similar buildings that wil meet their needs Building A: Purchase for a cash price of $612,300, useful life 26 years. Building D: Lease for 26 years with annual lease payments of $70,170 being made at the beginning of the year, Building C Purchase for $652,900 cash. This building is larger than needed; however, the excess space can be sublet for 26 years at a net annual rental of $6,430. Rental payments will be received at the end of each year. The Novak Inc. has no aversion to being a landlord hich bulding would you recommend that The Novak Inc. locate, assuming a 11% cost of funds? (Round factor values to S decimal places eg. 1.251 24 and final answer to 0 decimal place, e.p. 4S,S Net Present Value Building A Building 8 Building C The Novak Ine should locate itself in

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