VB Flantronics Inc Which Alternative Should Be Recommended Based on the Present Worth

question 5

Essay

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: $$\begin{array} { | l | l | l | } \hline \text { Alternative } & \text { Purchase } & \text { Lease } \\\hline \text { Initial Cost } & \$ 320,000 & -\\\hline \text { Lease } &- & \$ 40,000 \\\hline \text { Annual Operating Costs } & \$ 8500 & \$ 7000 \\\hline \text { Salvage Value } & \$ 80,000 &- \\\hline \text { Life, years } & 7 & 1 \\\hline\end{array}$$ Which alternative should be recommended based on the present worth method? Use a MARR of 9%.

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Definitions:

Mala In Se

Acts that are considered inherently evil or morally wrong by their very nature, such as murder, theft, and rape.

Morally Wrong

Actions or conduct that are considered to be ethically bad or unacceptable according to societal standards or personal beliefs.

Legislature

A governmental body with the power to make, amend, or repeal laws.

Transferred Intent

A legal doctrine allowing intent to harm one person to be transferred if an unrelated party is harmed instead.