RKE & Associates is considering the purchase of a building it currently leases for $30,000 per year. The owner of the building put it up for sale at a price of $170,000, but because the firm has been a good tenant, the owner offered to sell it to RKE for a cash price of $160,000 now. If purchased now, how long will it be before the company recovers its investment at an interest rate of 15% per year?
RKE & Associates is considering the purchase of a building it currently leases for $30,000 per year. The owner of the building put it up for sale at a price of $170,000, but because the firm has been a good tenant, the owner offered to sell it to RKE for a cash price of $160,000 now. If purchased now, how long will it be before the company recovers its investment at an interest rate of 15% per year?
Chapter23: Corporate Restructuring
Section: Chapter Questions
Problem 11P
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RKE & Associates is considering the purchase of a building it currently leases for $30,000
per year. The owner of the building put it up for sale at a price of $170,000, but because the firm
has been a good tenant, the owner offered to sell it to RKE for a cash price of $160,000 now. If
purchased now, how long will it be before the company recovers its investment at an interest rate
of 15% per year?
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