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You are considering purchasing a piece of rental real estate in the TCU area that had a cash flow in the year that just ended

You are considering purchasing a piece of rental real estate in the TCU area that had a cash flow in the year that just ended equal to $10,000. The next cash flow to be paid out by this investment property will be received one year from today will be 3% higher than the cash flow produced last year. You expect that strong rental demand by TCU students will make the cash flows in the future years grow at the same 3% rate into the future thereafter. Assume the yearly required rate of return for this type of real estate investment is 19%. What is the most you should be willing to pay today for this property?places).

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