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The City of Detroit, Michigan is slowly entering a renaissance period. A company owns office buildings that it leases to tenants. A particular building that costs $40 million has 75,000 ft^2 of office space. The building is expected to last for 30 years. The maintenance costs are $2 million each year. If the company's discount rate is 15%, determine the annual revenue that the company must make from rentals in this building in order to meet its investment criterion that the NPV must be greater than $1 million. Determine the minimum rental per square foot that the company must charge to meet this investment criterion.

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92268302

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