A large corporation hires you as a consultant. The firm has accumulated tax losses and it expects to be in this position for a number of years. The firm needs a new distribution facility on the West...

A large corporation hires you as a consultant. The firm has accumulated tax losses and it expects to be in this position for a number of years. The firm needs a new distribution facility on the West Coast to service its West Coast customers more efficiently. The facility has an estimated cost of $10 million. The firm is considering three alternative plans. Under plan A, the firm can borrow the $10 million and purchase the facility. Under plan B, the firm can issue common stock to raise the $10 million and purchase the facility. Under plan C, the firm can lease the facility from the current owners. The firm asks you to prepare a brief report outlining the tax consequences of each plan. Your report should also contain your recommendation as to the most tax-efficient plan.