Shamrock, Inc., a manufacturer of low-sugar, low-sodium, low-cholesterol TV dinners, would like to increase its market share in Western Canada. In order to do so, Shamrock has decided to locate a new factory in Kelowna, B.C. Shamrock 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 $611,000, useful life 25 years. Building B: Lease for 25 years with annual lease payments of $68,000 being made at the beginning of the year. Building C: Purchase for $659,000 cash. This building is larger than needed; however, the excess space can be sublet for 25 years at a net annual rental of $6,100. Rental payments will be received at the end of each year. Shamrock, Inc. has no aversion to being a landlord. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE. Calculate the net present value of three buildings, assuming a 11% cost of funds. (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round final answers to 0 decimal places, e.g. 5,275.)

		Net present value
Building A		$enter a dollar amount rounded to 0 decimal places $
Building B		$enter a dollar amount rounded to 0 decimal places $
Building C		$enter a dollar amount rounded to 0 decimal places $

In which building would you recommend that Shamrock, Inc. locate?

Shamrock, Inc. should locate itself in select a building Building A Building B Building C.

periods 1 2 3 4 5 6 7 8 9 10 2% 21/2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 15% 0.98039 0.97561 0.97087 0.96156 0.95238 0.94340 0.93458 0.92593 0.91743 0.90909 0.90090 0.89286 0.86957 0.96117 0.95181 0.94260 0.92456 0.90703 0.89000 0.87344 0.85734 0.84168 0.82645 0.81162 0.79719 0.75614 0.94232 0.92860 0.91514 0.88900 0.86384 0.83962 0.81630 0.79383 0.77218 0.75132 0.73119 0.71178 0.65752 0.92385 0.90595 0.88849 0.85480 0.82270 0.79209 0.76290 0.73503 0.70843 0.68301 0.65873 0.63552 0.57175 0.90583 0.88385 0.86261 0.82193 0.78353 0.74726 0.71299 0.68058 0.64993 0.62092 0.59345 0.56743 0.49718 0.88797 0.86230 0.83748 0.79031 0.74622 0.70496 0.66634 0.63017 0.59627 0.56447 0.53464 0.50663 0.43233 0.87056 0.84127 0.81309 0.75992 0.71068 0.66506 0.62275 0.58349 0.54703 0.51316 0.48166 0.45235 0.37594 0.85349 0.82075 0.78941 0.73069 0.67684 0.62741 0.58201 0.54027 0.50187 0.46651 0.43393 0.40388 0.32690 0.83676 0.80073 0.76642 0.70259 0.64461 0.59190 0.54393 0.50025 0.46043 0.42410 0.39092 0.36061 0.28426 0.82035 0.78120 0.74409 0.67556 0.61391 0.55839 0.50835 0.46319 0.42241 0.38554 0.35218 0.32197 0.24719 0.80426 0.76214 0.72242 0.64958 0.58468 0.52679 0.47509 0.42888 0.38753 0.35049 0.31728 0.28748 0.21494 0.78849 0.74356 0.70138 0.62460 0.55684 0.49697 0.44401 0.39711 0.35554 0.31863 0.28584 0.25668 0.18691 0.77303 0.72542 0.68095 0.60057 0.53032 0.46884 0.41496 0.36770 0.32618 0.28966 0.25751 0.22917 0.16253 0.75788 0.70773 0.66112 0.57748 0.50507 0.44230 0.38782 0.34046 0.29925 0.26333 0.23199 0.20462 0.14133 0.74301 0.69047 0.64186 0.55526 0.48102 0.41727 0.36245 0.31524 0.27454 0.23939 0.20900 0.18270 0.12289 0.72845 0.67362 0.62317 0.53391 0.45814 0.39365 0.33873 0.29189 0.25187 0.21763 0.18829 0.16312 0.10687 0.71416 0.65720 0.60502 0.51337 0.43630 0.37136 0.31657 0.27027 0.23107 0.19785 0.16963 0.14564 0.09293 0.70016 0.64117 0.58739 0.49363 0.41552 0.35034 0.29586 0.25025 0.21199 0.17986 0.15282 0.13004 0.08081 0.68643 0.62553 0.57029 0.47464 0.39573 0.33051 0.27651 0.23171 0.19449 0.16351 0.13768 0.11611 0.07027 0.67297 0.61027 0.55368 0.45639 0.37689 0.31180 0.25842 0.21455 0.17843 0.14864 0.12403 0.10367 0.06110 11 12 13 14 15 16 17 18 19 20 cial Calculators ENG 4:03 ( 1 ) PTF-40.141 periods |||| 1 1 be 10 #summw 5 ||| 1 12 ||| CONTool nic | gram | MIN May 1. 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En periods 9 11 1 2 10 1.10000 1.21000 133100 1.46410 161051 1.no 1110 1 29503 14115 1 536 19 115000 1.32250 4 5 1.1 1000 1. 12000 1.23210 1 25440 136763 1.40490 1.51807 157352 1.6506 176234 2011 231306 6 7 8 9 10 2 4 6% 8 1.02000 1.02500 1.03000 104000 105000 1.06000 1080 1.04040 105063 106000 108160 110250 1.12360 1 16640 106121 107689 109273 112486 1.15763 1.19102 1.25971 108243 1.10381 1.12551 11696 121551 1 26248 136049 1.10408 1.13141 1.15927 1.21665 127628 1.33823 1 46933 1.12616 115969 1.1905 1.26532134010 141852 15867 1.14869 1.18869 122987 1.31593 1.40710 150363 171182 1.17166 1 21840 1.26677 1.36857 147746 1.58385 1.85093 1.19509 1 24886 1.30477 1.42331 1.55133 1.68948 1.99200 1.21899 1.28008 1.34392 1.48024 162889 1.79085 2.15892 1.24337 1.31209 1.38423 1 53945 1.71034 1898.30 2.33164 1.26824 1.34489 1.42576 1.60103 1.79586 2.01220 2.51817 1.29361 137851 1.46853 166507 1 88565 2.13293 2.71962 1.31948 1.41297 1.51259 1.73168 191993 2.26090 2.93719 1.34587 1.448:30 1.55797 1 80094 2.07893 2.39656 3.17217 1.67210 1.77156 1.87041 1.97382 1 8804 1.94812 207616 2 21068 1.9256 2.149 230454 2.47996 2.17189 235795256803 277308 2.36736 2.59374 2.899423105AS 3.05302 35178 11 12 13 14 15 2.58043 2.85312 3.15176 3.47855 2.81267 3.13843 3.49845 899 3.06581 3.45227 3.88328 436349 3.34173 3.79750 431044 488711 3.64248 4 17725 4.78459 5.47357 535025 615279 7 07571 813706 16 17 18 19 20 1 37279 1.48451 1.60471 1.87298 2.18287 1.40024 152162 165285 1.94790 229202 1.42825 155966 1.70243 2.02582 2.40662 1.45681 159865 1.75351 2.10685 252695 1.48595 1.63862 1.80511 2.19112 265330 2.54035 2.69277 285434 3.02560 320714 3.42594 3.70002 3.99602 4.31570 4.66096 3.97031 4 32763 4.71712 5.14166 5.60441 4.59497 5.05447 5.55992 6.11591 6.72750 531089 6.13039 5.89509 686604 6.54355768997 7.26334 8.61276 8.06231 9.64629 9.35762 10.76125 1237545 14 23177 16 36654 21 22 23 24 25 1.51567 1.67958 1.86029 2.27877 2.78596 1.54598 1.72157 1.91610 2.36992 2.92526 1.57690 1.76461 1.97359 2,46472 3.07152 1.60844 1.80873203279 2.56330 3.22510 1.64061 185394 2.09378 2.66584 335635 339956 3.60354 3.81975 4.04893 4.29187 5.03383 5.43654 5.87146 6.34118 6.84847 6.10881 7.40025 8.94917 10.80385 1882152 6.65850 8.14028 9.93357 12.10031 21 64475 7.25787 8.95430 11 02627 13.55235 2489145 7.91108 9.84973 12.23916 15.17863 28.62518 8.6230B 10.83471 13.58546 17.00000 32 91895 26 27 28 29 30 1.67342 1.90029 2.15659 2.77247 3.55562 1.70689 1.94780 2.22129 2.88337 3.73346 1.741021.99650 2.28793 2.99870 3.92013 1.77584 2.04641 2.35657 3.11865 411614 1.81136 2.09757 242726 3.24340 432194 4.54938 7.39635 9.39916 11.91818 15.07986 19.04007 4.82235 7.98806 10 24508 13.10999 16.73865 21.32488 43.53512 5.11169 8.62711 11.16714 14.42099 18.57990 23.88387 50 06561 5.41839 931727 12.17218 15.86309 20.62369 26.74993 57 57545 5.74349 10.06266 13.26768 17.44940 22.81230 29.99912 5621177 608810 10 86767 14 46177 19.19434 25.41045 33.55511 76.14354 6.45339 11.73708 15.76333 21.11378 28.20560 37 173 87 56502 6 84059 1267605 17.18203 23.22515 3130821 42.09153 10069983 7.25103 13.69013 18.72841 25.54767 34.75212 47.14252 115.80480 7.68609 14.78534 20:41397 28.10244 38.57485 52.79962 133.17552 32 33 34 1 84759 2.15001 2.50008 3.37313 4.53804 188454 2.20376 2.57508 3.50806 4.76494 192223 2.25885 2.65234 3.64838 5.00319 1.96068 2 31532 2.73191 3.79432 525335 1.99989 2.37321 2.81386 3.94609 5.51602 20349 243254 288928 4.10393.79182 8.14725 15.96817 2225123 30.91268 42 81808 59.13557 153.15185 2.08069 249335 2.98523 426809 6.08141 8.63609 17.24943 24 25384 34.00395 47.52807 66.23164 176.12463 2.12230 2.56568 3.07478 443881 6.38548 9.15425 18.62528 26.41668 37.40434 52.75616 14.17966 2024 2 16474 2.61957 3.16703 4.61637 6.70475 9.70351 20.11530 28.81598 4114479 58.55934 83 08122 212.92489 220804 2.68506 3.26204 480102 7.03999 10.28572 2172452 31.40942 45.25926 65.00087 93.05097 267.6356 39 40 Table A.2 PRESENT VALUE OF 1 (PRESENT VALUE OF A SINGLE SUM)