ABC Ltd. is a multinational that wants to invest in the real estate business in Barcelona. Two alternatives are offered

[answerhappygod]

ABC Ltd. is a multinational that wants to invest in the real
estate business in Barcelona.
Two alternatives are offered by the owner of a property in one of
the most popular areas of the city.
Option A: Renting the property 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 0.07% monthly.
Option B: Acquiring the property with a mortgage scheme for 40
years. The current ownership is demanding an initial payment of
1,975,000 € and a monthly amount of 2,500 €.
The interest applicable rates are around 3.5% compounded yearly,
this is supposed to be the market rate for this type of
activities.
1) In terms of Finance, what is the difference between
Option A and Option B? (10 points)
2) What is the total amount that the company should pay in
Option A? (30 points)
3) What is the total amount that the company should pay in
Option B? (30 points)
4) Assuming Option B, the company is still thinking in
making annual payments, at the end of the year with a growth of
0.25% yearly. The annual interest rate would still be the same
3.5%. What is the difference of money between this action and what
you calculated in 3)? What is the present value of the difference?
(30 points)