Question 1 - A company could sell a building for $250,000 or lease it for $2,500

Question

Question 1 - A company could sell a building for $250,000 or lease it for $2,500 per month. What would need to be considered in determining if the lease option would be preferred? Question 2- Many fast-food restaurant chains, such as McDonald's, will occasionally discontinue restaurants in their system. What are some of the financial and non-financial considerations in deciding to eliminate a store? Question 3 - A chemical company has a commodity-grade and premium-grade product. Why might the company elect to process the commodity-grade product further to the premium-grade product?

Explanation / Answer

1. Payback period shpould be considered in choosing lease alternative.

If the lease term is less than 10 years and company needs funds at this point then it should sell the building now or vice versa.

2. Financial Considerations

Non-financial Considerations

3. Further Processing should be done in following cases

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