The investor be willing to pay today for the investment

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A real estate investor is considering an investment in a building that will generate profits of $22,000 at the end of each year for the next 10 years. The investor requires a 22% return on the investment to compensate for the risk they are taking. Forecasted annual appreciation of the building is 3.5%, and the investor will sell the building at the end of 10 years a. How much would the investor be willing to pay today for the investment? b. How much would the investor be willing pay today for the investment if profits at the then end of year 1 are $22,000, and are expected to grow 2.5% each following year? 

Reference no: EM131902887

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