1. A real estate investor is considering an investment in a building that will generate profits of...

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Finance

1.       A real estate investor isconsidering an investment in a building that will generate profitsof $22,000 at the end of each year for the next 10 years. Theinvestor requires a 22% return on the investment to compensate forthe risk they are taking.
a.       How much should the investorpay today for the investment?
b.       How much should the investorpay today for the investment if profits at the then end of year 1are $22,000, and are expected to grow 2.5% each followingyear?    I will love to know what excel formulas touse since the question has to be done using excel.

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3.7 Ratings (388 Votes)

PART a He should pat 8631006 for the investmentYearCash See Answer

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1. A real estate investor isconsidering an investment in a building that will generate profitsof $22,000 at the end of each year for the next 10 years. Theinvestor requires a 22% return on the investment to compensate forthe risk they are taking. a. How much should the investorpay today for the investment?b. How much should the investorpay today for the investment if profits at the then end of year 1are $22,000, and are expected to grow 2.5% each followingyear? I will love to know what excel formulas touse since the question has to be done using excel.

1. A real estate investor is considering an investment in a building that will generate profits of...

90.2K

Verified Solution

Question

Finance

Answer & Explanation Solved by verified expert

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1. A real estate investor isconsidering an investment in a building that will generate profitsof $22,000 at the end of each year for the next 10 years. Theinvestor requires a 22% return on the investment to compensate forthe risk they are taking.
a. How much should the investorpay today for the investment?
b. How much should the investorpay today for the investment if profits at the then end of year 1are $22,000, and are expected to grow 2.5% each followingyear? I will love to know what excel formulas touse since the question has to be done using excel.