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Current Attempt in Progress The Riverbed Inc., a manufacturer of low-sugar, low-sodium, low-cholesterol...

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Accounting

Current Attempt in Progress
The Riverbed 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, Riverbed has decided to locate a new factory in the Panama City area. Riverbed 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 \(\$ 615,000\), 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 a net annual rental of \(\$ 6,870\). Rental payments will be received at the end of each year. The Riverbed Inc. has no aversion to being a landlord.
Click here to view factor tables.
In which building would you recommend that The Riverbed 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.)
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