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The Swifty 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 Swifty 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, Swifty has decided to locate a new factory in the Panama City area. Swifty 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 $612,300, useful life 26 years. Building B: Lease for 26 years with annual lease payments of $70,170 being made at the beginning of the year. Building C: Purchase for $652,900 cash. This building is larger than needed; however, the excess space can be sublet for 26 years at a net annual rental of $6,430. Rental payments will be received at the end of each year. The Swifty Inc. has no aversion to being a landlord. Click here to view factor tables In which building would you recommend that The Swifty Inc. locate, assuming a 11% cost of funds? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to O decimal places, e.g. 458,581.) Net Present Value Building A $ 612100 Building B $ 673557 Building C $ 597057 The Swifty Inc. should locate itself in Building Cv
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