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Real estate investment is a type of alternative investments. An analyst has collected the following expected cash flows about a project: Year Cash Flows 1

Real estate investment is a type of alternative investments. An analyst has collected the following expected cash flows about a project:

Year Cash Flows

1 $10,000

2 25,000

3 50,000

4 35,000

The initial cost is $85,000. The discount rate is 8.125 percent. What is the investment's present value?

a. $13,700

b. $18,200

c. $12,400

d. $16,118

e. None of above

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