Which payment schedule should you accept

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olve the following questions using TVM formulas in Excel. Show your work to receive full credit.

1. You own a building that a local business wants to rent for the next 10 years. The business owner has offered to pay $40,000 today or pay $6,400 at the end of each of next 10 years. If your required rate of return is 10%, which payment schedule should you accept?

2. How much would you pay to participate in a real estate project that pays nothing for the first 10 years and $2,500 for the following 10 years if you can earn 13% return on other investments of similar risk?

3. If your tenant pays you rent of $24,000 a year for 10 years, what is the present value of the series of payments discounted at 10% annually?

Reference no: EM131859864

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