Kindly review the case and background to get a clear understanding of the problem and develop a suitable financial projection for issue #1, and prepare a report showing all the calculations and recommendations for appendix 1 only.

MGMT 8500: F21- capstone v3 Appendix One (Construct or lease) Objective: Should WMM lease or construct their own production facility Option 1: Construct Costs to incur: $ 200,000 Actual expenditure towards buying land, construct building and getting ready for use Taxes, insurance, and repairs (per year) Intended years of use Projected market value in 18 years Budgeted maximum expenditure towards buying $ 500,000 land, construction of building and getting ready $ 25,000 20 $ 1,100,000 for use. $ 175,000 Remainder in four payments of; Option 2: Lease Intended years of use First lease payment due now Rest of the lease payments (years 2-17) Operating costs to be paid by WMM Repairs (annual) Maintenance (annual) Initial one-time deposit, will be returned in year 20 $ 100,000 $ 100,000 $ 7,000 $ 18,000 $ 10,000 20 Required rate of return 12% Methodology: The consulting team is proposing to perform a NPV analysis and determine the benefit to leasing or construction. Based on the analysis, they will recommend the preferred option (construction or leasing).