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You have acquired land which is expected to generate net rental income (i.e. in excess of property taxes and maintenance costs) of $21,000 annually for
You have acquired land which is expected to generate net rental income (i.e. in excess of property taxes and maintenance costs) of $21,000 annually for the foreseeable future. You have an opportunity cost of capital of 5.5% annually. What is the present value of the land?
Is it correct to use the formula PV=A/i ? Is the opportunity cost of capital in this question i?
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