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please show work! The annual end-of-year lease payments on a building increase to 7% annually for...

please show work!

The annual end-of-year lease payments on a building increase to 7% annually for the next 5 years. If 5% is an appropriate discount rate, and if the first year's lease payment is $100K, what is the most an investor would pay to be the recipient of these lease payments?

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Answer #1

Cash flow $100,000.00 $107,000.00 $114,490.00 $122,504.30 $131,079.60 YEAR pv @ 5% 0.9524 0.9070 0.8638 0.8227 0.7835 discounted cash flows $95,238.10 $97,052.15 $98,900.77 $100,784.59 $102,704.30 $494,679.90 2 4 would pay

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