What is the required monthly lease

Reference no: EM132160940

Question: An office building should last 60 years, but this owner will sell it at 20 years for 40% of its construction cost. For the first 20 years it can be leased as Class A space, which is all this owner operates. When the building is sold, the land's cost will be recovered in full.

(a) If the owner wants a 12% rate of return, what is the required monthly leasing cost?

(b) Assuming that the building is vacant 5% of the time, what is the required monthly lease?

Reference no: EM132160940

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