Clarence Gleason has inherited an apartment complex. He is now faced with the decision of whether to sell or to rent the property. A real estate advisor believes that Clarence should rent the property, because he could receive $\$ 65,000$ per year for 10 years and then could sell the property for $\$ 400,000$. A development company has offered Clarence $\$ 300,000$ down and promises to pay $\$ 50,000$ per year for the next 15 years. The land has a remaining mortgage of $\$ 130,000$. If Clarence sells the complex, he will have to pay that sum now. If he rents the property, he will have to pay $\$ 20,000$ per year for 10 years. The cost of capital is 16 percent.

1. Calculate the net present value of each alternative 2. Interpretive Question: Discuss the qualitative factors that might affect the decision to sell or rent.