In: Finance
Growth Rate 4%
Required Return 11%
Year 1 Rent 20,000
Years Stable Rent 3
Years Growing Rent 7
Year Sold 10
Sale Price in 10 Years 325,000
Ask Price Today 200,000cash flows
Present Value | |
PV First 3 Years | |
PV Next 7 Years | |
PV Sale price | |
Total PV |
Determine cash flows period 0-10
Year | Ask price | Rent | Sale price | Net CF |
0 | -200000 | -200000.00 | ||
1 | 20000 | 20000.00 | ||
2 | 20000 | 20000.00 | ||
3 | 20000 | 20000.00 | ||
4 | 20800 | 20800.00 | ||
5 | 21632 | 21632.00 | ||
6 | 22497.28 | 22497.28 | ||
7 | 23397.17 | 23397.17 | ||
8 | 24333.06 | 24333.06 | ||
9 | 25306.38 | 25306.38 | ||
10 | 26318.64 | 325000 | 351318.64 |
PV First 3 Years | $48,874.29 |
PV Next 7 Years | 79557.22 |
PV Sale price | $114,459.96 |
Total PV | $242,891.47 |
Workings