Business, 06.05.2020 00:44, micahpauleen748

The Cheyenne 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, Cheyenne has decided to locate a new factory in the Panama City area. Cheyenne 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 $615,000, useful life 28 years. Building B: Lease for 28 years with annual lease payments of $71,570 being made at the beginning of the year. Building C: Purchase for $659,900 in cash. This building is larger than needed: however, the excess space can be sublet for 28 years at a net annual rental of $6,870. Rental payments will be received at the end of each year. The Cheyenne Inc. has no aversion to being a landlord. Required:(A) In which building would you recommend that The Cheyenne Inc. locate, assuming a 12% cost of funds?

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The Cheyenne Inc., a manufacturer of low-sugar. low-sodium, low-cholesterol TV, dinners, would like...