1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Greeley [361]
3 years ago
8

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

n the Sunbelt. In order to do so, Skysong has decided to locate a new factory in the Panama City area. Skysong 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 $620,000, useful life 27 years. Building B: Lease for 27 years with annual lease payments of $71,170 being made at the beginning of the year. Building C: Purchase for $657,500 cash. This building is larger than needed; however, the excess space can be sublet for 27 years at a net annual rental of $6,200. Rental payments will be received at the end of each year. The Skysong Inc. has no aversion to being a landlord. Click here to view factor tables In which building would you recommend that The Skysong Inc. locate, assuming a 11% cost of funds
Business
1 answer:
DENIUS [597]3 years ago
7 0

Answer:

Building C

Explanation:

Building A: Purchase for a cash price of $620,000, useful life 27 years.

Building B: Lease for 27 years with annual lease payments of $71,170 being made at the beginning of the year.

Building C: Purchase for $657,500 cash. This building is larger than needed; however, the excess space can be sublet for 27 years at a net annual rental of $6,200. Rental payments will be received at the end of each year.

11% cost of funds

we must determine the present value of each option:

  • Building A's present value = $620,000
  • Building B's present value = $71,170 x 9.48806 (PV annuity due factor, 11%, 27 periods) = $375,265.23
  • Building C's present value = $657,500 - [$6,200 x 8.5478 (PV ordinary annuity factor, 11%, 27 periods) = $657,500 - $52,996.36 = <u>$604,503.64 (LOWEST PV)</u>
You might be interested in
The study done by the Committee of Sponsoring Organizations (COSO) on financial statement frauds that occurred during the period
Nadya [2.5K]

Answer:

Most of these firms had audit committees that met at least four times a year.

Explanation:

COSO stands for Committee of Sponsoring Organization, which is an organization that is dedicated to offering the thought of guidance as well as leadership on the fraud deterrence, internal control and management of  enterprise risk.

From the findings which is not found as fraud is that the most of the firms or businesses had committees of audit which met at least 4 times a year.

3 0
2 years ago
Interdepartmental politics is a major problem with __________________ communication.
Mumz [18]

Answer:

Interdepartmental politics is a major problem with <u>horizontal </u>communication.

✘ Create dotted-line relationships to formalize communications.

✔ Establish goals for communication in advance.

✔ Focus communication on achieving a certain task or outcome.

✘ When creating teams, choose people with wide differences in rank within the organization.

6 0
2 years ago
During January, Ajax Co. Incurs 1,850 hours of direct labor at an hourly cost of $11.80 in producing 1,000 units of its finished
Brums [2.3K]

Answer:

Std rate per hour: 11.00    

Std hours = 1000*2 =2000    

Actual hours = 1850      

Actual rate = 11.80

   

Labor cost variance = Std cost - Actual cost    

Labor cost variance  = (2000*11) - (1850*11.80)

Labor cost variance = 170 Unfavorable

Labor rate variance = Actual hrs (Std rate - Actual rate)  

Labor rate variance = 1850 *(11-11.80)

Labor rate variance = 1480 Unfavorable

Labor qty variance = Std rate (Std hrs-Actual hrs)  

Labor qty variance = 11 (2000-1850)

Labor qty variance = 1650 Favorable.

5 0
2 years ago
Demand is created through meeting customer buying criteria, credit terms, awareness (promotion) and accessibility (distribution)
fredd [130]

Answer: cake

Explanation:

Demand is created through meeting customer buying criteria, credit terms, awareness (promotion) and accessibility (distribution).

According to the Thrift segment's customers, the product that was the most competitive at the end of last year is Cake.

3 0
3 years ago
. Which type of credit requires that borrowers carefully manage the debt so it doesn't get out of control? Explain why this type
Nata [24]

Answer:

The type of credit that requires borrowers to carefully manage debt so that it doesn't get out of control is revolving credit. The customer can purchase anything they want up to a certain amount each month, and if the borrower does not carefully manage their revolving credit, it could get out of control.

4 0
2 years ago
Read 2 more answers
Other questions:
  • We run a delivery service, and we believe our firm has market risk equally between that of UPS and FedEx. We know the following
    11·1 answer
  • Must a copyright symbol be displayed to protect the copyright?
    11·1 answer
  • Which of the following is a true statement about closing the books of a corporation?A)Expenses are closed to the Expense Summary
    7·2 answers
  • What are the two views on why asset prices fluctuate so much that they lead to financial crises and bank​ failures?
    12·1 answer
  • Saving and loans associations are not subject to federal regulations
    5·1 answer
  • An unlimited payment plan for controlling sales force expenses is not used very widely is flexible so management can allow for c
    5·1 answer
  • To discourage competitive entry, a company can price its new product low, using penetration pricing. This pricing strategy also
    10·1 answer
  • The management of Irving Inc., an apparel company based in Letonia, decides to expand the company's operations to several other
    9·1 answer
  • Which of these best describes the relationship
    13·1 answer
  • AWNSER THIS ASAP PLEASE
    15·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!