Your firm enjoys the benefit of a (beginning of) month lease…
Your firm enjoys the benefit of a (beginning of) month lease payment of $3,000, which is $1,500 below the current market rent for your space. You have five years (60 months) remaining on your lease. Your cost of capital (discount rate) is 15 percent. Your landlord has approached you and asked what she would have to pay you in cash today to make you willing to rewrite your lease so that you are paying market rent for the remaining five years. What is the minimum payment you would require from the landlord as compensation for giving up the advantageous rental rate? Ignore income taxes. Round your answer to the nearest dollar.