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You can buy property today for $2.7 million and sell it in 4 years for $3.7 million. (You earn no rental income on the property.)
You can buy property today for $2.7 million and sell it in 4 years for $3.7 million. (You earn no rental income on the property.) If the interest rate is 12%, what is the present value of the sale price?What is the present value of the future cash flows, if you also could earn $170,000 per year rent on the property? The rent is paid at the end of each year.
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