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Exercise 3 (10 Points) Hans has two options to invest his lottery winnings of 95,000. 1. Buying real estate that will generate monthly rent payments
Exercise 3 (10 Points) Hans has two options to invest his lottery winnings of 95,000. 1. Buying real estate that will generate monthly rent payments (paid by the end of the month) of 500. 2. Buying company shares that in the first ten years yield dividends of 1,500 per year and afterwards yield 2,500 per year. Assuming that the overall interest rate is at 2%. Which option should Hans select? Argue on the basis of present values
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