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Assume that a company owns an apartment building that has net cash flows of $1,000,000 for each of the next three years, at which point
Assume that a company owns an apartment building that has net cash flows of $1,000,000 for each of the next three years, at which point the building will be replaced. The discount rate is 6%.
The firm does an impairment test on the building.
What is the economic value of the building?
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