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Which option is the least costly to the company

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Question - Waterway Industries 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 $525000. Location B may be acquired with a down payment of $105000 and annual payments at the end of each of the next twenty years of $52500. Location C requires $42000 payments at the beginning of each of the next twenty-five years. Assuming Waterway's borrowing costs are 7% per annum, which option is the least costly to the company?

Reference no: EM132478169

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