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Business, 01.10.2019 23:30 chriscook4471

The buffalo 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, buffalo has decided to locate a new factory in the panama city area. buffalo 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 $611,000, useful life 25 years. building b: lease for 25 years with annual lease payments of $71,370 being made at the beginning of the year. building c: purchase for $657,400 cash. this building is larger than needed; however, the excess space can be sublet for 25 years at a net annual rental of $6,800. rental payments will be received at the end of each year. the nash inc. has no aversion to being a landlord. which building would you recommend that the nash inc. locate, assuming a 12% cost of funds?

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