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Question 9 The Bonita 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
Question 9 The Bonita 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, Bonita has decided to locate a new factory in the Panama City area. Bonita 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 Bonita Inc. has no aversion to being a landlord. Click here to view factor tables in which building would you recommend that The Bonita Inc. locate assum nga 1 places, e.g. 458,581.) %cost of unds Ron factor a esto 5de imal aces e 1 512 and nal answer o decimal Net Present Value Building A Building B Building C 612,000 The Bonita Inc. should locate itself in
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