Task 6. 10 points max

Milord Co requires a new manufacturing facility. Management found three locations; all of which would

provide needed capacity, the only difference is the price. Location A may be purchased for $500,000.

Location B may be acquired with a down payment of $100,000 and annual payments at the end of each

of the next twenty years of $50,000. Location C requires $40,000 payments at the beginning of each of

the next twenty-five years. Assuming companys borrowing costs are 8% per annum, which option is

the least costly to the company?

Answer the following question and show your computations!