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As. The total construction costs of the new building was 50,000,000. The building will depreciate in a straight-line basis in 5 years, after which it

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As. The total construction costs of the new building was 50,000,000. The building will depreciate in a straight-line basis in 5 years, after which it will be worthless. The alternative is that ABN AMRO will sell the building immediately to an investor and subsequently lease back the building. If leased, the lease payments will be 11,000,000 per year for 5 years. Now suppose that (1) ABN AMRO's borrowing cost is 8%,(2) its tax rate is 30%, and (3) the lease qualifies as a true tax lease. If ABN AMRO does not sell and lease back the headquarters, what is the amount of the lease-equivalent loan? A) 26.2 million B) 30.5 million C) 39.7 million D) question is unanswerable

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