Question: The Indigo Inc., a manufacturer of low - sugar, low - sodium, low - cholesterol TV dinners, would like to increase its market share in
The Indigo Inc., a manufacturer of lowsugar, lowsodium, lowcholesterol TV dinners, would like to increase its market share in the Sunbelt. In order to do so Indigo has decided to locate a new factory in the Panama City area. Indigo 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 $ useful life years.
Building B: Lease for years with annual lease payments of $ being made at the beginning of the year.
Building C: Purchase for $ cash. This building is larger than needed; however, the excess space can be sublet for years at a net annual rental of $ Rental payments will be received at the end of each year. The Indigo Inc. has no aversion to being a landlord.
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In which building would you recommend that The Indigo Inc. locate, assuming a cost of funds? Round factor values to decimal places, eg and final answer to decimal places, eg
Net Present Value
Building A
$enter a dollar amount rounded to decimal places
Incorrect answer
Building B
$enter a dollar amount rounded to decimal places
Incorrect answer
Building C
$enter a dollar amount rounded to decimal places
Incorrect answer
The Indigo Inc. should locate itself in select a building
Building C
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