SBX Co. Ltd needs to build 20 new apartments for its senior employees on its empty land worth 1,50,000. GK builders has offered to build maintain and lease the flats to sbx co. for 15 years after which the flats would be acquired by SBX Co. at a nominal cost of 2,75,000 per apartment. The following estimates are provided by GK builders:
Area per apartment in square feet
Cost of construction		1200
Miscellaneous cost		2400
End of life maintance cost (in years 13,14,15): 20,000 per flat		1.5 % of construction cost
Apartments will be depreciated on a straight-line basis with no residual value
GK builders intends to charge lease on a stepped basis where it will charge normal lease rental during the first five years. From six years through ten, an additional 12% over the normal lease rental will be charges during the final five years (11 to 15), the lease will be 25% over the normal
GK builder;s required rate of return is 12% for the project and wants to earn and additional 1,00,00,000 over the cost of construction after all adjustments. The applicable tax rate for GK builders is 35% Assume all cash flows arise at the end of the year and all construction-related expenses are paid at begining of the construction period
Comoute the lease rental chargable to SBX co.