1.Suppose that you are currently leasing your office space for P180,000 per year. You have the opportunity...
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Question:
1.Suppose that you are currently leasing your office space for P180,000 per year. You have the opportunity to buy the facility for P2.1M. With a 10% down payment, you can get a mortgage for 8% interest per year. You can pay for the down payment from bank account that has been earning you 5% interest per year. Setting aside all other issues, should you lease the facility? Explain (i.e. what are your opportunity costs associated with each option).
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