Question
Given the following expected cash flow stream, determine the NPV of the proposed investment in an income producing property and determine whether or not the
Given the following expected cash flow stream, determine the NPV of the proposed investment in an income producing property and determine whether or not the investment should be pursued: investment horizon: five years; expected yearly cash flow in each of the next five years: $127,628; expected sale price at end of five years: $1,595,350; opportunity cost of investment 6%; current market price of property: $1,750,000.
A.NPV is -$20,246; decision is to invest.
B.NPV is -$20,246; decision is not to invest.
C.NPV is $249,967; decision is to invest.
D.NPV is $249,967; decision is to not invest.
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