Which alternative should be recommended ?

VB Flantronics Inc. is a company that designs makes and sells computer and home entertainment sou Show more VB Flantronics Inc. is a company that designs makes and sells computer and home entertainment sound systems along with a line of headphones and microphones for personal digital media. The company is trying to decide whether it should purchase or lease a building for its manufacturing and research-and-development operation in China. If the building is leased a payment will have to be made at the beginning of each year. The estimated costs are the following: Alternative Purchase Lease Initial Cost $320000 Lease $40000 Annual Operating Costs $8500 $7000 Salvage Value $80000 Life years 7 1 Which alternative should be recommended ? Use a MARR of 9%. 1. Purchase 2. Lease Show less

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