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You have decided to invest in a small commercial office building that has one tenant. The tenant has a lease that calls for annual rent
You have decided to invest in a small commercial office building that has one tenant. The tenant has a lease that calls for annual rent payments of $ per year for the next three years. However, after that lease expires you expect to be able to increase the rent by per year for the next seven years. You plan to sell the building for $ ten years from now.a Create a table showing the projected cash flows for this investment assuming that the next lease payment will be made in one year.b Assuming that you need to earn per year on this investment, what is the maximum price that you would be willing to pay for the building today? Use the NPv function. Please show excel formulas.
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