The Coca-Cola Company owns a building for its operations. Coca-Cola Company uses only half of the building and is considering two options for the unused space. The Pepsi Store would like to purchase the half of the building that is not being used for $550,000. A 5% commission would have to be paid by Coca-Cola at the time of purchase. AMC Company would like to lease the half of the building for the next 5 years at $100,000 each year. Coca-Cola Company would have to continue paying $15,000 of property taxes each year and $2,000 of yearly insurance on the property, according to the proposed lease agreement.

REQUIRED: (SHOW YOUR WORK)

Determine the differential income or loss from the lease alternative.