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A rental property with a 20-year life can be purchased for $100,000. Net cash benefits per year have an expected value of $15,000 and a
A rental property with a 20-year life can be purchased for $100,000. Net cash benefits per year have an expected value of $15,000 and a standard deviation of $5,000. At a 10 percent required return, compute the expected net present value and standard deviation of net present value under the assumption of:
Horizon 20 years
Investment $100,000
Expected cash flows E(CF) of $15,000
Standard deviation of $5,000
Cost of capital 10%
Assume no salvage value
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