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What is the maximum amount the investor would be willing

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Assume that an investor has an annual discount rate of 10% (e.g. r = .1). This investor is considering the purchase of a commercial real estate asset that is expected to generate $10,000 per year for the next 20 years. In addition, at the end of 20 years, the investor would sell the property at an expected transaction price of $50,000. What is the maximum amount the investor would be willing to pay today for this commercial asset?

Reference no: EM132621805

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