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What is the total present value of all future cash flows

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Reference no: EM133034197

Question - You are thinking to buy a condominium as an investment property. The sellers of the building have listed it at $1,250,000. There are three units that generate monthly a total net cash flows of $3,000. You plan to own the building for five years before you sell it. Your real estate agent estimates the future sales price of the building will grow at 5% annually. Another property you have analyzed appears to offer a 1% monthly rate of return.

Required - What is the total present value of all future cash flows?

a) $1,615,816.76

b) I have no idea

c) $949,586

d) None of the above

Reference no: EM133034197

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