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Please help with calculating each NPV of the buildings. Please show work, to help me understand the answer. Thanks! The Sweet Inc., a manufacturer of
Please help with calculating each NPV of the buildings. Please show work, to help me understand the answer. Thanks!
The Sweet Inc., a manufacturer of low-sugar, low-sodium, low-cholesterol TV dinners, would like to increase its market share in the Sunbelt. In order to do so, Sweet has decided to locate a new factory in the Panama City area. Sweet 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 $612,000, useful life 26 years. Building B: Lease for 26 years with annual lease payments of $71,630 being made at the beginning of the year. Building C: Purchase for $653,300 cash. This building is larger than needed; however, the excess space can be sublet for 26 years at a net annual rental of $6,080. Rental payments will be received at the end of each year. The Sweet Inc. has no aversion to being a landlord. in which building would you recommend that The Sweet Inc 458,581.) ocate, assuming a 10% cost of unds? Round factor values to 5 dec na Places, eg .25124 and fi a ans ver Od cima paces e. Net Present Value Building A Building B s Building C $
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