Engineering Economy

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Raniedel Inocencio
Raniedel Inocencio's picture
Engineering Economy

Juan plans to raise a new building of 1 million. He raise the building by issuing 10%, 20 yr bond that would pay one hundred fifty thousand interest per year an repay the amount of maturity he can least it for Php 140,000 per year. First payment being due one year from now. The building has an expected life of 20 yrs. ignoring effects on income tax, what is the difference between buying the building and leasing it?

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