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The Blossom 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
The Blossom 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, Blossom has decided to locate a new factory in the Panama City area. Blossom 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 aninual rental of $6,080. Rental payments will be received at the end of each year. The Blossom Inc. has no aversion to being a Aandiord. Click here to view factor tables In which buildies would you recommend that The Blossom Inc locate, assuming a 10% cost of funds? (Round factor values to 5 decimal places, e.g. 125124 and final answer to 0 decimal places, e. .458,581.) The Blossom Inc. should locate itself in
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