Using equivalent rent method, you are to analyse a comparable lease and use the results of that analysis to calculate the equivalent annual rental amount for the subject lease. (must include workings and express answer with two decimal points)

The following information is given:

The discount rate to use is 8% per annum nominal. Furthermore, for the 2 leases below that you are comparing you can assume all other things are equal apart from the lease differences detailed below.

• Comparable Lease Details
  • Recent letting, tenancy area 100 square meters, fixed annual rental $24000 to be paid in 4 equal quarterly payments at the beginning of each quarter. Lease term 2 years.
• Subject lease details
  • Tenancy area 120 square meters, lease term 2 years, rent to be paid monthly in advance in equal installments. No rent reviews.