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A company is planning to move to a larger office and is trying to decide if the new office should be owned or leased. Cash

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A company is planning to move to a larger office and is trying to decide if the new office should be owned or leased. Cash flows from operations are expected to remain level over a 10 year holding period at $200,000 if owned and $180,000 if leased. If purchased, the company will invest $300,000 in equity and finance the remainder with a 10 year interest-only loan. Cash flow from sale of the property at the end of year 10 is expected to be $500,000. What is the incremental return on equity to the company from owning relative to leasing the property? (Note: Canvas can't handle "%" signs, if your answer is 10.02%, just type 10.02)

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