Professional Properties is considering remodeling the office building it leases to Heartland Insurance. The remodeling costs are estimated at $3.4 million. If the building is remodeled, Heartland Insurance has agreed to pay an additional $820,000 a year in rent for the next 5 years. The discount rate is 15 percent. What is the benefit of the remodeling project to Professional Properties?
A) -$651,233
B) -$489,072
C) $5,214
D) $128,399
E) $311,417

Question

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The Answer of Professional Properties is considering remodeling the office building it leases to Heartland Insurance. The remodeling costs are estimated at $3.4 million. If the building is remodeled, Heartland Insurance has agreed to pay an additional $820,000 a year in rent for the next 5 years. The discount rate is 15 percent. What is the benefit of the remodeling project to Professional Properties?
A) -$651,233
B) -$489,072
C) $5,214
D) $128,399
E) $311,417

Professional Properties Is Considering Remodeling the Office Building It Leases