You can buy property today for $3.8 million and sell it in 4 years for $4.8 million. (You earn no rental income on the property.) a. If the interest rate is 7%, 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 $280,000 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?
You can buy property today for $3.8 million and sell it in 4 years for $4.8 million. (You earn no rental income on the property.)
a. If the interest rate is 7%, what is the
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 $280,000 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?
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