Marin Inc, a manufacturer of low-sugar, low-sodium, low-cholesterol TV dinners, would like to increase its...
70.2K
Verified Solution
Link Copied!
Question
Finance
Marin Inc, a manufacturer of low-sugar, low-sodium, low-cholesterol TV dinners, would like to increase its market share in Western Canada. To do so, Marin has decided to locate a new factory in Kelowna, B.C. Marin will either buy or lease a site, depending on 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 \\( \\$ 600,000 \\), useful life 25 years. Building B: Lease for 25 years with annual lease payments of \\( \\$ 70,000 \\) being made at the beginning of the year. Building C: Purchase for \\( \\$ 652,000 \\) cash. This building is larger than needed; however, the excess space can be sublet for 25 years at a net annual rental of \\( \\$ 7,900 \\). Rental payments will be received at the end of each year. Marin has no aversion to t. andlord. Click here to view Table A.4 - PRESENT VALUE OF AN ORDINARY ANNUITY OF 1 Click here to view Table A.5 - PRESENT VALUE OF AN ANNUITY DUE OF 1 Calculate the net present value of three buildings, assuming a \12 cost of funds. (For calculation purposes, use 5 decimal places as displayed in the foctor toble provided. Round final answers to O decimal places, eg. 5.275.) In which building would you recommend that Marin locate? Marin should locate itself in
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!