You own a building that a local business wants to rent for the next ten years. The business owner

has offered to pay $$75,000$ today or $$12,000$ each year's end for the next ten years. If your required

rate of return is $10\%,$ which payment schedule should you accept based on the calculation?

$7.$ How much would you pay to participate in a real estate project that pays nothing for the first ten

years and $$5,000$ for the following ten years if you can earn a $12\%$ return on other investments of

similar risk?

$8.$ Calculate the IRR and NPV for the following cash flows. Assume a $9\%$ discount rate

Year Project $1$

Cash flow

Project $2$

Cash flow

$0-$$$33,000-$$$33,000$

$13,00022,000$

$24,00015,000$

$35,0005,000$

$415,0004,000$

$522,0003,000$

$9.$ If your tenant pays you rent of $$30,000$ a year for ten years, what is the present value of the series

of payments discounted at $12\%$ annually?

$10.$ You will invest $$500,000$ in a real estate investment project that generates the following cash flows.

Year $12345$

Cash flow $185,000185,000185,000185,000185,000$

Assuming a $10\%$ discount rate, what is the NPV of this project? What is the IRR?