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Business, 14.03.2020 03:21 isabelacarraler

The Crane 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, Crane has decided to locate a new factory in the Panama City area. Crane 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 $612,100, useful life 26 years. Building B: Lease for 26 years with annual lease payments of $71,490 being made at the beginning of the year. Building C: Purchase for $655,200 cash. This building is larger than needed; however, the excess space can be sublet for 26 years at a net annual rental of $6,850. Rental payments will be received at the end of each year. The Crane Inc. has no aversion to being a landlord. In which building would you recommend that The Crane Inc. locate, assuming a 11% cost of funds? (Round factor values to 5 decimal places, e. g. 1.25124 and final answer to 0 decimal places, e. g. 458,581.)

Net Present Value:

Building A $

Building B $

Building C $

The Crane Inc. should locate itself in what building??

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