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Suppose that annual income from a rental property is expected to start at $1,350 per year and decrease at a uniform amount of $55 each year after the first year for the 12-year expected life of the property. The investment cost is $8,200, and i is 9% per year. Is it a good investment? Assume that the investment occurs at time zero (now) and that the annual income is first received at EOY one. What is the present equivalent of the rental income?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M91237619

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