Students are required to develop an individual report addressing the specific tasks set out in the guideline below.

Task briefing:

ZYX Ltd. is a multinational that wants to open a new factory in Barcelona area. Two alternatives are offered by the owner of the property where they want to install the company.

Option A: Renting a plant with a perpetual contract, meaning for ever and ever. In this case, the company has to pay 4,000 per month and the contract contains a clause stating that the rent price will be growing at a 0.05% monthly.

Option B: Acquiring the plant with a mortgage scheme for 50 years. The current ownership is demanding an initial payment of 2,000,000 and a monthly amount of 3,000 .

The interest applicable rates are around 2% compounded yearly, this is supposed to be the market rate for this type of activities.

1. 1) In terms of Finance, what is the difference between Option A and Option B? (10 points)

2. 2) What is the total amount that the company should pay in Option A? (30 points)

3. 3) What is the total amount that the company should pay in Option B? (30 points)

4. 4) Assuming Option B, the company is still thinking in making annual payments, at the end of the year with a growth of 0.15% yearly. The annual interest

   rate would still be the same 2%. What is the difference of money between this action and what you calculated in 3)? (30 points)