A real estate property is on the market. You have estimated it will give you net cash flows of $5136 per month. You hope to sell it in 9 years for $308182. Your required return is 9.46%, how much should you be willing to pay for the property today?
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A real estate property is on the market. You have estimated it will give you net cash flows of $5136 per month. You hope to sell it in 9 years for $308182. Your required return is 9.46%, how much should you be willing to pay for the property today?
Here,
Net Cash Flows per month (PMT) is $5136
Sale Value after 9 years (FV) is $308182
Required Return (r) is 9.46%
Time Period (n) is 9
Compounding Period (m) is Monthly i.e 12
Step by step
Solved in 2 steps
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