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Assume that you are considering purchasing a commercial property today (which is the beginning of Year 1) for $100,000. You as an investor have a
Assume that you are considering purchasing a commercial property today (which is the beginning of Year 1) for $100,000. You as an investor have a discount rate of 25%. The property is expected to generate cash flows in the amounts of $10,000 at the end of year 1, $13,000 at the end of year 2, $16,000 at the end of year 3, $20,000 at the end of year 4, $125,000 at the end of year 5. Compute the present value of the expected cash flows generated by this property.
n | amount |
CF0 | $ (100,000) |
CF1 | $ 10,000 |
CF2 | $ 13,000 |
CF3 | $ 16,000 |
CF4 | $ 20,000 |
CF5 | $ 125,000 |
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