Genesco is considering two alternative 5-year leases. The first lease is for $2,380 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? Your answer should be between 2000.00 and 3000.00, rounded to 2 decimal places, with no special characters.
Genesco is considering two alternative 5-year leases. The first lease is for $2,380 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? Your answer should be between 2000.00 and 3000.00, rounded to 2 decimal places, with no special characters.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Genesco is considering two alternative 5-year leases. The first lease is for $2,380 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?
Your answer should be between 2000.00 and 3000.00, rounded to 2 decimal places, with no special
characters.
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