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You signed a five-year rental lease agreement for an office space with an annual rent of $1 million, paid at the beginning of each year
You signed a five-year rental lease agreement for an office space with an annual rent of $1 million, paid at the beginning of each year of the lease. Just before you pay your first rent payment, the property owner told you he has decided to use the office space for another purpose and proposes to buy back the lease from you. The rent for a similar space is now $1.25 million per year. What would be the minimum compensation that the landlord should offer you in order to cancel your lease agreement? And why? Assume r=6%.
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