Determine the present value of the stream

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Reference no: EM13999809

Please pay special attention to decimal places needed for answers.

An owner can lease her building for $120,000 per year for three years. The explicit cost of maintaining the building is $40,000, and the implicit cost is $55,000. All revenues are received, and costs borne, at the end of each year. If the interest rate is 5 percent, determine the present value of the stream of:

Instructions: Do not round intermediate calculations. Round your final calculation to two decimal places.

a. Accounting profits.

b. Economic profits.

Reference no: EM13999809

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