DB 6.3 - Using Time Value of Money Techniques to analyze Several Alternatives Eagle Inc., is a manufacturer and would like to increase its market share. In order to do so, Eagle has decided to identify and locate a new, bigger factory. Eagle 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 buildings. Building A: Purchase for a cash price of $1,600,000, useful life 24 years. Building B: Lease for 24 years with annual lease payments of $125,000 being made at the beginning of each year. Building C: Purchase for $1,750,000 cash. This building is larger than needed; however, the excess space can be sublet for 24 years at a net annual rental of $21,000. Rental payments will be received at the end of each year. Eagle Inc. has no aversion to being a landlord. IMPORTANT: At least two of the options above will require a time value of money calculation. In order to receive full credit for this problem, be sure to do the following for your time value of money calculations: a) Indicate which interest table you referred to (i.e., Tables 1, 2, 3, or 4) b) Indicate which of the following formulas you used to solve this problem: 1) FV - SF(i, n) 2) PV = S x F(i, n) 3) FVA= 1 Fi,n) 4) PVA = IF(i, n) c) Show your calculation(s) for each of your answers. Required: Calculate the cost of each building option, and rank the buildings from the lowest cost to the highest cost. Assume an 8% discount rato (interest rate) is appropriate for Eagle Inc. (Notes: Base your recommendation solely on the data above. Ignore income taxes or other factors not described in the data above.)