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A storage facility can be purchased for $120,000.  The maintenance and taxes are estimated to be...

A storage facility can be purchased for $120,000.  The maintenance and taxes are estimated to be $8,000 per year.  Alternatively, you can rent the facility for $11,000 per year.  Assume that in ten years, the facility can be sold for $100,000.  Determine the IRR or cost of renting the facility, by interpolating the compound interest factors.

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Expert Solution

Solution is as follows:

As Net Outflow is greater than Net Inflow so, we took negative discounting rates.

jeff jeffy answered 1 week ago
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