THE NEXT TWO (2) QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION: A national company wants to obtain cash for expansion of their operations and is considering the following two options (based on the fact that they own free and clear the building in which the head office is located): (a) A conventional mortgage in the amount of 70% of lending value, written at 5.5% per annum, compounded monthly. This loan would have a 25 -year term and amortization period, and monthly payments. (b) A sale-leaseback arrangement with a large pension fund. The pension fund would expect an annual yield of 6.75% per annum, compounded monthly, and payable monthly, based on the agreed purchase price. The pension fund is prepared to grant a 25 -year lease at fixed rents but with no repurchase option. An independent appraisal has determined that the headquarter property has a current market value of $2,000,000 and is capable of producing a net operating income of $210,000 per year. 9. The monthly mortgage payment and monthly lease payment are: (1) $8,597.22;$11,250.00 (2) $11,402.35;$7,875.00 (3) $9,345.22;10,789.64 (4) $8,597.22;$8,690.21 10. What forecasted market value of the property in 25 years would make the company indifferent between the two options? (1) $2,000,000 (2) $750,345 (3) $1,000,000 (4) $662,419