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What is the present value of the sales price

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Reference no: EM133015598

Question - You can buy property today for $3.8 million and sell it in 4 years for $4.8 million. (You earn no rental income on the property)

a. If the interest rate is 7%, what is the present value of the sales price?

b. Is the property investment attractive to you?

c-1. What is the present value of the future cash flows, I you could also earn $280,000 per year rent on the property? The rent is paid at the end of the end of each year.

c-2. Is the property investment attractive to you now?

Reference no: EM133015598

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