Considering two alternative five year leases

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Reference no: EM131551042

Genesco is considering two alternative 5-year leases. The first lease is for $2, 020 per month for 60 months. The second lease has no rent for the first 9 months, and then even monthly payments for the remaining 51 months. The company uses a WACC of 12% (monthly discounting of 1% per month) to evaluate these types of situations. At what lease payment amount on the second lease would the company be indifferent between these two options?

Reference no: EM131551042

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