Business, 25.09.2020 01:01 F3R

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

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Answer from: wittlemarie

Answer and Explanation:

Year Cash Inflow Discounting factor 9%, 12 Years Present Value

0 -$8,200 1 -$8,200.00

1 $1,350 0.8929 $1,205.42

2 $1,295 0.7972 $1,032.37

3 $1,240 0.7118 $882.63

4 $1,185 0.6355 $753.07

5 $1,130 0.5674 $641.16

6 $1,075 0.5066 $544.60

7 $1,020 0.4523 $461.35

8 $965 0.4039 $389.76

9 $910 0.3606 $328.15

10 $855 0.322 $275.31

11 $800 0.2875 $230.00

12 $745 0.2567 $191.24

Net Present Value -$1,264.95

Since the net presnet value comes in negative so it is not beneficial for a company as it is not able to cover the initial investment

Answer from: Quest

im almost done gimme more time to get the answer

Answer from: Quest

it should be

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