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What is the maximum price you should pay for the building

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Question - Suppose you want to buy an apartment building. The apartment building will generate a rental income of $6,000 at the end of each month for the next 25 years. However, $10,000 has to be incurred each year to maintain the building. The maintenance costs are paid at year-end. Interest rates will remain constant at 10 percent compounded annually.

Required - What is the maximum price you should pay for the building?

Reference no: EM132696466

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