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Sunland Company requires a new manufacturing facility. It found three locations; all of which would provide the needed capacity, the only difference is the price.
Sunland Company requires a new manufacturing facility. It found three locations; all of which would provide the needed capacity, the only difference is the price. Location A may be purchased for $508000. Location B may be acquired with a down payment of $101600 and annual payments at the end of each of the next twenty years of $50800. Location C requires $40640 payments at the beginning of each of the next twenty-five years. Assuming Sunland's borrowing costs are 7% per annum, which option is the least costly to the company?
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