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You have an apartment for rent. One potential tenant has promised to sign an annual lease for eight years, with each year's rent (paid at
You have an apartment for rent. One potential tenant has promised to sign an annual lease for eight years, with each year's rent (paid at the end of the year) of $32,000. Rather than make yearly payments, a second tenant has offered to pay you an upfront single cash payment for the use of the apartment over the next eight years. If your discount rate is 9%, what minimum single cash payment would make you sign the lease with the second tenant?
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