A 4,000 square foot space is to be leased at an annual contract rent of $25 per square foot for five years. Due to difficulties in finding a tenant, the owner has offered a $20,000 cash incentive to secure the lease. The owner's required rate of return is 11%. What is the present value of this lease? O $8,333.33 $403,275.28 O $265,425.35 O $363,275.28
A 4,000 square foot space is to be leased at an annual contract rent of $25 per square foot for five years. Due to difficulties in finding a tenant, the owner has offered a $20,000 cash incentive to secure the lease. The owner's required rate of return is 11%. What is the present value of this lease? O $8,333.33 $403,275.28 O $265,425.35 O $363,275.28
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:A 4,000 square foot space is to be leased at an annual contract rent of $25 per square foot
for five years. Due to difficulties in finding a tenant, the owner has offered a $20,000 cash
incentive to secure the lease. The owner's required rate of return is 11%.
What is the present value of this lease?
$8,333.33
$403,275.28
O $265,425.35
O $363,275.28
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