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The owner of an office building is evaluating different leasing alternatives for his building. One alternative is to charge rent the first year of $35
The owner of an office building is evaluating different leasing alternatives for his building. One alternative is to charge rent the first year of $35 a square foot and after the first year have the rent increase with CPI. The building owner will pay all the operating expense, which are expected to be $11 a square foot the first year and will increase by 5% each year thereafter. If CPI increases 3% per year and the lease is for a 5 year term, what is the effective rent of this leasing option using a 9% discount rate? O $28.73 O $37.16 O $25.01 O $24.92
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