Spinning Wheels Co. is considering renting a new bike shop. The landlord has offered a number of alternatives for paying the rent. The present value factors at the company's rate of return are as follows:
$$\begin{array} { c c }
\underline{\text { Period }} & \underline{\text { Present Value Factor }} \
1 & 0.90909 \
2 & 0.82645 \
3 & 0.75131
\end{array}$$ The landlord offered a 3-year lease with the rent payments as follows: $8,000 at the end of the first year, $12,000 at the end of the second year, and $14,000 at the end of the third year.
The present value of the rent payments over the life of the lease is:

Question

Spinning Wheels Co. is considering renting a new bike shop. The landlord has offered a number of alternatives for paying the rent. The present value factors at the company's rate of return are as follows:
$$\begin{array} { c c } 
\underline{\text { Period }} & \underline{\text { Present Value Factor }} \
1 & 0.90909 \
2 & 0.82645 \
3 & 0.75131
\end{array}$$ The landlord offered a 3-year lease with the rent payments as follows: $8,000 at the end of the first year, $12,000 at the end of the second year, and $14,000 at the end of the third year.
The present value of the rent payments over the life of the lease is:

Quizplus · Accepted Answer

The Answer of Spinning Wheels Co. is considering renting a new bike shop. The landlord has offered a number of alternatives for paying the rent. The present value factors at the company's rate of return are as follows:
$$\begin{array} { c c } 
\underline{\text { Period }} & \underline{\text { Present Value Factor }} \
1 & 0.90909 \
2 & 0.82645 \
3 & 0.75131
\end{array}$$ The landlord offered a 3-year lease with the rent payments as follows: $8,000 at the end of the first year, $12,000 at the end of the second year, and $14,000 at the end of the third year.
The present value of the rent payments over the life of the lease is:

Spinning Wheels Co The Landlord Offered a 3-Year Lease with the Rent Payments