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Discussion regarding Finance case exercise. I've don the procedures for all the options. Calculated and run the numbers. Just having issues addressing that final highlighted part. Discussing the topics within these options.

Option A: Miguel buys a rent house for $60,000 and puts the net rent (Net Operating Income, NOI) - after taxes, insurance, and repair expenses into Simmons Bank. The net rent is $600/month. The after tax rate of return on the rent payments, deposited in the bank, is 3%/year, compounded monthly. Miguel plans to sell the house after 15 years and add the sale proceeds to his rent account at the bank to pay for his son's college and have a nest egg started for his retirement. When Miguel sells the house, he will have to pay a 20% capital gains tax on the fully depreciated value of the house. The inflation rate is 2.5%/year. The value of the house increases with the inflation rate. Ignore costs associated with the purchase and sale of the house (title insurance, survey, closing fees, realtor commission, depreciation recapture taxes, etc.). Option B: Miguel buys 5 rent houses at $60,000 each. He uses his $60,000 in cash as a 20% down payment and borrows $240,000 from Simmons Bank. The net rent is used to pay off the loan over 15 years. At the end of the 15 years, Miguel plans to sell the houses and put the cash into an account at Simmons Bank to pay for his son's college and establish a nest egg for retirement. The inflation rate is 2.5%. The houses increase in value with the inflation rate. When he sells the houses, he pays a 20% capital gains tax on the fully depreciated value of the houses. Ignore costs associated with the purchase and sale of the houses (title insurance, survey, closing fees, realtor commission, depreciation recapture taxes, etc.). Option C: Miguel doesn't want to have to deal with renters, property maintenance, property taxes, property insurance, or any other issues required to actively manage his investments. He decides to invest his $60,000 inheritance in the stock market and asks a New York Life stock broker for advice on how to invest his money. His broker convinces Miguel to invest in a mutual fund with a 4% front-end load. Miguel's net investment is expected to grow at an annual rate, after brokerage fees and taxes, of 7%. After 15 years, Miguel plans to convert the investment into cash and deposit the money into an account at Simmons Bank for his son's college and to establish a nest egg for his retirement. Option D: Miguel can't decide on any other investment option. He puts his $60,000 in an account at Simmons Bank that earns 2.5% after taxes (which matches the inflation rate). Discuss which option would be best for Miguel. Include comments on the following issues as they relate to this case: Active vs Passive, Time Value of Money, Inflation, Leverage, Risk, Advantages and Disadvantages of Debt

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