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.

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

hi,

henry is an economist and wants to understand the relationship between inflation and consumer spending habits. for his research, he needs the consumer price index for 2014 and the inflation rate. based on the prices of goods given, what will he find to be the cpi and inflation rate for 2014? assume that a consumer’s basket for three consecutive years consists of the following:

you dont privide answer choices.

answer - 15% of a inflatation rate is 15% less in cpi

answer/// equals both average variable cost and average total cost at their respective minimums;