Show the cash flow diagram for the problem

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Two years ago the initial rental for the use of equipment and facilities was paid 5 years in advance with option to renew the rent for another 5 years in advance, with an option to renew the rent for another 5 years by payment of P15,000 annually at the start of each year for the renewal period. Now, the lessor asks the lessee, if it could be possible to repay the rental that will be paid annually in the renewed 5- year period.

Problem 1. Show the cash flow diagram for the problem.

Problem 2. If the lessee will consider the request, what would be the fair repayment to be made to the lessor if interest is now figured at 8%.

Reference no: EM132623797

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