Negotiation of Lease Rentals

The break-even rentals of the lessor and the lessee represent the range of acceptable level of rentals. The break even lease rental of the lessor sets the lower limit, while the break even rental of the lessee sets the upper limit of the range. The actual rental has to be negotiated within the range. A rental within the range implies a positive. NAL / NPV(L), both for the lessor and the lessee. In a way, the difference between the break even lease rental for the lessor and the lessee (ie, the spread) represents the bargaining area for the negotiation of the actual lease rental for a lease proposal.

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