A property owner is evaluating the following alternatives for leasing space in his office building for the next five years: Gross lease. Rent will be $31 per square foot each year with the lessor responsible for payment of all operating expenses. Expenses are estimated to be $9 during the first year and increase by $1 per year thereafter. Calculate the effective rent to the owner (after expenses) for the lease using a 10 percent discount rate.

Options:

A $16.15

B $20.19

C $25.24

D $19.18