Business, 24.03.2021 20:10 banuelos90016

The Oriole Inc., a manufacturer of low-sugar, low-sodium, low-cholesterol TV dinners, would like to increase its market share in the Sunbelt. In order to do so, Oriole has decided to locate a new factory in the Panama City area. Oriole 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 very similar buildings that will meet their needs. Building A: Purchase for a cash price of $610,000, 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 $650,000 cash. This building is larger than needed; however, the excess space can be sublet for 25 years at a net annual rental of $6,000. Rental payments will be received at the end of each year. Brubaker Inc. has no aversion to being a landlord.
Instructions
In which building would you recommend that Brubaker Inc. locate, assuming a 12% cost of funds?

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The Oriole Inc., a manufacturer of low-sugar, low-sodium, low-cholesterol TV dinners, would like to...