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Question 15: You can buy property today for $3 million and sell it in 5 years for $4 million. You will earn no rental income
Question 15: You can buy property today for $3 million and sell it in 5 years for $4 million. You will earn no rental income on the property. a. If the interest rate is 8%, should you buy the property? b. Suppose the property earns $200,000 rent, at the beginning of each year. Should you buy it? c. Suppose you think that there is only a 75% chance the property will sell for $4,000,000 and a 25% chance that it will sell for $3,000,000 in 5 years. Should you buy the property? Ouestion 16
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