A property owner is evaluating the following alternatives for leasing space in his office building for the next five years:

Net lease with steps. Rent will be $15 per square foot the first year and will increase by $3.10 per square foot each year until the end of the lease. All operating expenses will be paid by the tenant.

Calculate the effective rent to the owner (after expenses) for the lease using a 11 percent discount rate.

Options

A. $20.56

B. $18.50

C. $22.62

D. $24.67