Building A: Purchase for a cash price of $614,400, useful life 27 years. Building B: Lease for 27 years with annual lease payments of $71,660 being made at the beginning of the year. Building C: Purchase for $651,400 cash. This building is larger than needed; however, the excess space can be sublet for 27 years at a net annual rental of $6,980. Rental payments will be received at the end of each year. The Bonita Inc. has no aversion to being a landlord. Click here to view factor tables. In which building would you recommend that The Bonita Inc. locate, assuming a 12% cost of funds? (Round factor values to 5 decimal places, eg 1.25124 and final answer to O decimal places, eg. 458,581)

Building A: Purchase for a cash price of $614,400, useful life 27 years. Building B: Lease for 27 years with annual lease payments of $71,660 being made at the beginning of the year. Building C: Purchase for $651,400 cash. This building is larger than needed; however, the excess space can be sublet for 27 years at a net annual rental of $6,980. Rental payments will be received at the end of each year. The Bonita Inc. has no aversion to being a landlord. Click here to view factor tables. In which building would you recommend that The Bonita Inc. locate, assuming a 12% cost of funds? (Round factor values to 5 decimal places, eg 1.25124 and final answer to O decimal places, eg. 458,581)

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter15: Decision Analysis

Section: Chapter Questions

Problem 5P: Hudson Corporation is considering three options for managing its data warehouse: continuing with its...

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