Question
Assume that we believe that the expected cash flow is $500 and the expected rate of return (cost of capital) is 20% from a project.
Assume that we believe that the expected cash flow is $500 and the expected rate of return (cost of capital) is 20% from a project. This is a 1-year project. Is it worse to commit an error in cash flows or in cost of capital? Does your conclusion change if this is a 50-year project?
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Real Estate Finance Theory And Practice
Authors: Terrence M. Clauretie, G. Stacy Sirmans
5th Edition
0324305508, 9780324305500
