Expected to generate no cash flows for several years

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1. A building is expected to generate no cash flows for several years and then generate annual cash flows forever. What is the value of the building if the first annual cash flow is expected in 3 years, the first annual cash flow is expected to be 18,650 dollars, all subsequent annual cash flows are expected to be 0.31 percent higher than the cash flow generated in the previous year, and the cost of capital for the building is 10.88 percent?

2. What is the value of a building that is expected to generate fixed annual cash flows of 81,950 dollars every year for a certain amount of time if the first annual cash flow is expected in 5 years, the last annual cash flow is expected in 8 years, and the appropriate discount rate is 9.19 percent?

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Reference no: EM131965860

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