Stemway Company requires a new manufacturing facility. It found three locations: all of which would...
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Stemway Company requires a new manufacturing facility. It found three locations: all of which would provide the needed capacity, the only difference is the price. Location A may be purchased for $500,000. Location B may be acquired with a down payment of $100.000 and annual payments at the end of each of the next twenty years of $50.000 Location requires $40,000 payments at the beginning of each of the next twenty-five years. Assuming Stemway's borrowing costs are 8% per annum, which option is the least costly to the company
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