You can buy property today for $2.4 million and sell it in 5 years for $3.4 million. (You earn no rental income on the property.) a. If the interest rate is 8%, what is the present value of the sales price? (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.) 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 $140,000 per year rent on the property? The rent is paid at the end of each year. (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.) c-2. Is the property investment attractive to you now? a. Present value million Is the property investment attractive to you? Present value b. c-1. million c-2. Is the property investment attractive to you now?
You can buy property today for $2.4 million and sell it in 5 years for $3.4 million. (You earn no rental income on the property.) a. If the interest rate is 8%, what is the present value of the sales price? (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.) 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 $140,000 per year rent on the property? The rent is paid at the end of each year. (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.) c-2. Is the property investment attractive to you now? a. Present value million Is the property investment attractive to you? Present value b. c-1. million c-2. Is the property investment attractive to you now?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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You can buy property today for $2.4 million and sell it in 5 years for $3.4 million. (You earn no rental income on the property.)
a. If the interest rate is 8%, what is the present value of the sales price? (Do not round intermediate calculations. Enter your answer
in millions rounded to 3 decimal places.)
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 $140,000 per year rent on the property? The rent is paid
at the end of each year. (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.)
C-2. Is the property investment attractive to you now?
a.
Present value
million
b.
Is the property investment attractive to you?
C-1.
Present value
million
C-2.
Is the property investment attractive to you now?
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