Present value of this estimated income stream

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You are evaluating an income property that provides increasing rental income. Each rental payment is received at year-end. The first year's rent is expected to be $8,500 and rent is expected to increase by 7% each year. What is the present value of this estimated income stream over the first 5 years if the discount rate is 12%?

What would be the present value of the rental income if the rent is expected to continue forever? In this case, assume that the first rent will be received at the end of year 2, is expected to be $8000, and the rent will continue to grow at a rate of 4% annually. The discount rate is 12%.

Reference no: EM132674850

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