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Mr. Richards owns a property that, if sold today, will provide him with $1,280,000 in cash flow after taxes. If the property is held, the
Mr. Richards owns a property that, if sold today, will provide him with $1,280,000 in cash flow after taxes. If the property is held, the annual after-tax cash flow received will be as follows: $105,000 for years 1 to 5 and $120,000 for years 6 to 10. If held and sold in 10 years, the property is expected to provide $1,600,000 in after-tax cash flow. Also, Mr. Richards can receive a 9.40% rate of return by investing the sales proceeds today in a different project. Should he keep the property OR sell and invest in the second property. |
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