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You are thinking of buying a vacation rental home. It is expected to generate cash flows of $40,000 per year in years one through four
You are thinking of buying a vacation rental home. It is expected to generate cash flows of
$40,000
per year in years one through four and
$50,000
per year in years five through eight. If the appropriate discount rate is
10%
, what is the present value of these cash flows? Assume the cash flows occur at the end of each year.
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