our company wants to lease an office building in Singapore and has found a good location downtown. The asking lease payment is US$15,000 per month including utilities and your company estimates needing it for between 2 to 4 years. The office owner is willing to write you a contract that allows you out of the lease any time after 2 years for a cash payment of US$25K, but if you vacate before 2 years the whole 4 year lease payment less payments to date will be charged.
- If your company has only $350K budgeted in funds to spend risk on this lease, after how many months will they have to vacate if they do not add money or set up an investment plan? Is this a good business deal?
- If the Company can invest an additional $1000 each month at 11% annual could they avoid the early vacation fine and how many more months could the company stay in Singapore and remain within the $350,000 budget?