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Suppose that annual income from a rental property is expected to start at $1,200 per year and decrease at a uniform amount of $35 each year after the first year for the 17-year expected life of the property. The investment cost is $8000, and 10% 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?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91265986

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