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Phil pays 5 million for the rent of a building for 7 years. He decides to sublet the building charging a rent of 1 million
Phil pays 5 million for the rent of a building for 7 years. He decides to sublet the building charging a rent of 1 million at the end of the first and second years and 1.3 million at the end of the third year until the end of the seventh year. Calculate the internal rate of return for this project.
A bank offers Phil an investment rate of 14.5% per year for an investment of 5 million for a term of 7 years. What would you recommend to Phil?
Note: Please answer in detail showing every step. thank you.
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