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Consider the problem below of computing the effective rent. In year 1, the rent is $15 per sq ft, in year 2 the rent is
Consider the problem below of computing the effective rent.
In year 1, the rent is $15 per sq ft, in year 2 the rent is $16 per sq ft, and in year 3 the rent is $20 per sq ft. Assume rent payments are made annually. Suppose also that i=10%.
-What is the NPV of the rent payments?
-What is the effective rent?
ANSWER USING A FINANCIAL CALCULATOR
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