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A store has 5 years remeining on its lease in a mall. Pent is $2,100 per month, 60 payments remain, and the next payment is

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A store has 5 years remeining on its lease in a mall. Pent is $2,100 per month, 60 payments remain, and the next payment is due in 1 month, The mairs owner plans to seal the property in a vear and wants rent at that pime to be high so that the property wil appear more valuable. Therefore; the store has been olfered a "great deal" (owner's words) on a new 5 -vear lease. The new lease cals for no rent for 9 months, then payments of $2,500 per month for the next 51 months, The lease cannot be broken, and the store's WACC is 12% (or 1% per month). a. Shoud the new lease be accepted? (Vint: Be sure to ure 1% per monthi) b. If the store owner decided to bargain with the matrs owner iver the new lease peyment, what new lease poyment would make the store owner indiflerent the rent during months 10 to 60 ) Do not round iniemediate caculations, hound vour ansmer to the nearest cenc. s. c. The storet owner is not sure of the 12% WACC-it could be higher or lower, At whet nominal wACC would the store owner be indifferent between the two leases? (Hint: Caiculate the differences between the fwo payment streams; then find is thR.) po not round intermediate caiculations; Round your answer to two decinal places. %

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