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Your company has the opportunity to buy a piece of land located next to their administrative offices. The realtor estimates the land might be worth

Your company has the opportunity to buy a piece of land located next to their administrative offices. The realtor estimates the land might be worth $150,000 in five years. In the meantime, the company can rent the space to another company for $1,000 per month. (The other company plans to use the space for overflow parking.)

Your boss has asked you to determine how much the company should pay for the land today, assuming the company wants to earn 10% on any investment. Which tables would you use to determine the amount?

  • PV of a single amount
  • PV of an annuity
  • FV of a single amount
  • FV of an annuity

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