The Cheyenne Inc., a manufacturer of low-sugar, low-sodium, low-cholesterol TV dinners, would like to increase its market share in theSunbelt. In order to do so, Cheyenne has decided to locate a new factory in the Panama City area. Cheyenne will either buy or lease asite depending upon which is more advantageous. The site location committee has narrowed down the available sites to the followingthree 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 cash. This building is larger than needed; however, the excess space can be sublet for 28 years at anet annual rental of $6,870. Rental payments will be received at the end of each year. The Cheyenne Inc. has no aversion to being alandlord.Show Transcribed TextIn which building would you recommend that The Cheyenne Inc. locate, assuming a 12% cost of funds? (Round factor values to 5 decimalplaces, e.g. 1.25124 and final answer to O decimal places, e.g. 458,581.)Building ABuilding BBuilding C$$$Net Present ValueSThe Cheyenne Inc. should locate itself in

By comparing the value of money today to its value in the future, present value allows individuals…

The Cheyenne Inc., a manufacturer of low-sugar, low-sodium, low-cholesterol TV dinne Sunbelt. In order to do so, Cheyenne has decided to locate a new factory in the Panama site depending upon which is more advantageous. The site location committee has narr three very similar buildings that will meet their needs. Building A: Purchase for a cash price of $615,000, useful life 28 years. 4.570 L

The Cheyenne Inc., a manufacturer of low-sugar, low-sodium, low-cholesterol TV dinne Sunbelt. In order to do so, Cheyenne has decided to locate a new factory in the Panama site depending upon which is more advantageous. The site location committee has narr three very similar buildings that will meet their needs. Building A: Purchase for a cash price of $615,000, useful life 28 years. 4.570 L

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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