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What is the present value of the sales price

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Reference no: EM133186119

Question - You can buy property today for $3.3 million and sell it in 5 years for $4.3 million. (You earn no rental income on the property.)

a. If the interest rate is 9%, 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, if you also could earn $230,000 per year rent on the property?

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

Reference no: EM133186119

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