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Suppose you inherited a restaurant. The annual rent for it is $100,000 for the next year and will go up by 5% every year. A
Suppose you inherited a restaurant. The annual rent for it is $100,000 for the next year and will go up by 5% every year. A company offers to rent it at a fixed annual rent for 5 years. After year 5, you could re-negotiate or rent it to someone else. What is the minimum acceptable fixed rental payments for this five-year agreement? Use a discount rate of 12%.
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