The interest rate is 20%. A ground floor studio in the busy area of the city can be let out as an office space as is and average rental price for such studio is $1,000 per year at the moment. Or it can be turned into a cafe Buying caf equipment, furniture and hiring people until the caf start bringing a steady income require $22.000 up front investment. It is expected that the cafe will bring a stream of net income equal to $5,000 per year starting one year from now. No other uses are contemplated. The theory of asset markets predicts that the studio can be offered for sell for OSS.000 and a cafe will be organized $25.000 and a cafe will be organized $2,000 and it will be let out $3.000 and a cafe will be organized $5,000 and it will be let out