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Rick's Repairs, Inc

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Rick's Repairs, Inc. is considering renting a new 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:

Period

Present Value Factor

0.90909

0.82645

0.75131

The landlord offered a 2-year lease with $20,000 to be paid for rent at the end of each year.

The present value of rent payments over the life of the lease is:

Select one:

A. $20,000

B. $33,208

C. $34,711

D. $40,000

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