A store has 5 years remaining on its lease in a mall. Rent is$1,900 per month, 60 payments remain, and the next payment is duein 1 month. The mall's owner plans to sell the property in a yearand wants rent at that time to be high so that the property willappear more valuable. Therefore, the store has been offered a"great deal" (owner's words) on a new 5-year lease. The new leasecalls for no rent for 9 months, then payments of $2,500 per monthfor the next 51 months. The lease cannot be broken, and the store'sWACC is 12% (or 1% per month).

1. Should the new lease be accepted? (Hint: Be sure touse 1% per month.)
   
   -Select-YesNoItem 1
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3. If the store owner decided to bargain with the mall's ownerover the new lease payment, what new lease payment would make thestore owner indifferent between the new and old leases?(Hint: Find FV of the old lease's original cost at t = 9;then treat this as the PV of a 51-period annuity whose paymentsrepresent the rent during months 10 to 60.) Round your answer tothe nearest cent. Do not round your intermediatecalculations.
   
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5. The store owner is not sure of the 12% WACC—it could be higheror lower. At what nominal WACC would the store owner be indifferentbetween the two leases? (Hint: Calculate the differencesbetween the two payment streams; then find its IRR.) Round youranswer to two decimal places. Do not round your intermediatecalculations.
   
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