1

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

Question

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

The Flounder Inc., a manufacturer of low-sugar, low-sodium, low-cholesterol TV dinners, would like to increase its market sha

The Flounder 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, Flounder has decided to locate a new factory in the Panama City area. Flounder 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 $610,600, useful life 27 years. Building B: Lease for 27 years with annual lease payments of $70,870 being made at the beginning of the year. Building C: Purchase for $657,200 cash. This building is larger than needed; however, the excess space can be sublet for 27 years at a net annual rental of $6,110. Rental payments will be received at the end of each year. The Flounder Inc. has no aversion to being a landlord. Click here to view factor tables In which building would you recommend that The Flounder Inc. locate, assuming a 12% cost of funds? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.) Net Present Value Building A $ -610600 Building B Building C $ $ The Flounder Inc. should locate itself in

Answers

Building A
Cash paid = -$-610600
Building B
First payment made now is = $70870
And Annual payment for 26 years
Present value of annual lease = $70870 + (Annual Lease * PVAF (26 years ,12%))
=$70870+(70870*7.89566)
NPV $       -6,30,435
Building C
Cash paid $      6,57,200
Less:
Present value Of Annual Rent $          48,529
($6110*7.94255)
NPV $     -6,08,671
Should be located itself in Building C


Similar Solved Questions

1 answers
Contents Grades ner 2020 Reservations Course Contents > Correction #3 (08/03 Mo 11:59 PM) > Question...
contents Grades ner 2020 Reservations Course Contents > Correction #3 (08/03 Mo 11:59 PM) > Question 03 Three ropes A, B and C are tied together in one single knot K. (See figure.) 10 A 9 8 7 K 6 y (m) 5 4 3 2 B С 1 0 0 1 3 4 6 7 8 9 10 2 5 x (m) If the tension in rope A is 70.5 N, then ...
1 answers
The Corporation has $350 million in cash and 100 million shares outstanding, Suppose the corporate tax...
The Corporation has $350 million in cash and 100 million shares outstanding, Suppose the corporate tax is 20%, and investors pay no taxes on dividends, capital gains, or interest income. Investors had expected the Corporation to pay out the $350 million through a share repurchase. Suppose instead th...
1 answers
A spring with a constant of #3 (kg)/s^2# is lying on the ground with one end attached to a wall. An object with a mass of #3 kg# and speed of #5 m/s# collides with and compresses the spring until it stops moving. How much will the spring compress?
A spring with a constant of #3 (kg)/s^2# is lying on the ground with one end attached to a wall. An object with a mass of #3 kg# and speed of #5 m/s# collides with and compresses the spring until it stops moving. How much will the spring compress?...
1 answers
When looking at the definition of internal control as contained in COSO’s Internal Control-Integrated Framework and...
When looking at the definition of internal control as contained in COSO’s Internal Control-Integrated Framework and the professional standards are quite broad and comprehensive. Define internal control and its purpose. Explain the major concepts that are included in the definition of inter...
1 answers
CASE STUDY: OSTEOPOROSIS MEDICAL HISTORY Mrs. Bone, a 62 yr old Caucasian woman, is referred by...
CASE STUDY: OSTEOPOROSIS MEDICAL HISTORY Mrs. Bone, a 62 yr old Caucasian woman, is referred by her physician for the development of an exercise prescription. She is 10 yr postmenopausal and has never been on hormone replacement therapy. She was diagnosed with hyperthyroidism Coveractive thyroid gla...
1 answers
1. a) Identify and Explain the 3 motives for holding Cash, and Give 2 uses of...
1. a) Identify and Explain the 3 motives for holding Cash, and Give 2 uses of the Cash Budget. b) What is the main goal of Cash Management? Describe and explain one cash management technique used to speed-up cash collection c) What are Marketable Securities? Give three examples of Marketable Securit...
1 answers
In the market for air conditioners, you observe that the price went up and the quantity...
In the market for air conditioners, you observe that the price went up and the quantity went down. Which of the following could POSSIBLY have caused these changes? Select all that apply. In the market for air conditioners, you observe that the price went up and the quantity went down. Which of the f...
1 answers
Please help with #1 a and b. thank you Use the following data for all problems:...
please help with #1 a and b. thank you Use the following data for all problems: The data below defines the sea-level concentration of dissolved oxygen for fresh water as a function of temperature: T°C omg/L 0 8 16 14.621 11.843 9.870 24 32 40 8.418 7.305 6.413 a. Approximate o(19) using a 1st...
1 answers
24. [-17 Points] DETAILS HARMATHAP12 9.9.027. MY NOTES PRACTICE ANOTHER Cost, revenue, and profit are in...
24. [-17 Points] DETAILS HARMATHAP12 9.9.027. MY NOTES PRACTICE ANOTHER Cost, revenue, and profit are in dollars and x is the number of units. Suppose that the total revenue function for a product is R(x) - S0x and that the total cost function is C[x) - 2200 + 30x + 0.01x2 (a) Find the profit from t...
1 answers
How many electrons will be in the valence shell of non-H atoms when they make covalent...
How many electrons will be in the valence shell of non-H atoms when they make covalent bonds?...
1 answers
C) Using your answers to question 5 and 6a, what percent of the mixture obtained in...
c) Using your answers to question 5 and 6a, what percent of the mixture obtained in reaction 1 is the ortho isomer? d) What percent of the mixture obtained in reaction 1 is the meta isomer? e) What percent of the mixture obtained in reaction 1 is the para isomer? f) Could we have used Mass Spectrome...
1 answers
What z score corresponds to a one sided p-value of 0.95?
What z score corresponds to a one sided p-value of 0.95?...
1 answers
Assume the following information for a company that produced 10,000 units and sold 8,000 units during...
Assume the following information for a company that produced 10,000 units and sold 8,000 units during its first year of operations and produced 8,000 units and sold 10,000 units during its second year of operations: Selling price Direct materials Direct labor Variable manufacturing overhead Sales co...
1 answers
Case Study 1:The concept of “Employee Voice” is discussed at length in Chapter 2 of the Budd textbook. Review the reasons for why Human Resource managers might want to develop a strategy for creating...
Case Study 1:The concept of “Employee Voice” is discussed at length in Chapter 2 of the Budd textbook. Review the reasons for why Human Resource managers might want to develop a strategy for creating employee voice. Then follow the instructions provided below in preparation of Case Study...

-- 0.009044--