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Instead of paying $10, 000 in annual rent for an office space for the next 10 years, an engineering consulting firm that you work for
Instead of paying $10, 000 in annual rent for an office space for the next 10 years, an engineering consulting firm that you work for decides to take out a $100, 000 loan at 6% interest for the same 10 year period. The firm will invest the $10, 000 saved in rent each year into an account that earns 18% (growth stocks). Choose the result of the analysis that you will convey to the firm. Does this make financial sense? Bonus $1600/year, YES Need $3300/year more, NO none of these Break even Need $1800 year more, NO
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