A lessor is planning to finance the purchase of a $$17,500,000$ aircraft with $75\%$ debt that will be leased to an airline. Following are the details of the lease and financing

$$ Lease rate factor is $0\mathrm{.}85\%$

$$ The period of the lease is $10$ years $(120$ months$)$

$$ The interest on the loan the bank will charge you is LIBOR of $4\mathrm{.}0\%$ plus drag of

$0\mathrm{.}75\%$ per year

$$ Debt service is $69\%$ of income received from lease payments

$$ Maintenance reserves are $$62,625$ per month and are recognized as revenues.

$$There is a maintenance outflow in the $62$nd month requiring a payment of $$3,757,500$

$$ Lease origination legal fees are $$500,000$

$$ One$-$time financing transaction fees are $$400,000$

$$ Residual value $(121$st month$)$ is $$7,320,000$

$1)$ Estimate the lease rental per month, financing payment $($including the split between interest and principal, the balloon payment at the end of the lease period $(121$st month$),$ and levered and unlevered rates of return for the lessor.

Hint: The monthly loan payment is restricted to $69\%$ of the monthly lease payment. It means that after $120$ months, the loan will not be fully amortized $(69\%$ of the lease payment is less than a normal loan payment that would fully amortize the loan over $120$ months$).$ The remaining loan principal will be paid as a balloon payment after the lease is over $($in $121$st month$).$