Assume you will get 20 rental payments paid over 20 years at the beginning of each year. Initially, th rent equals R=$12; but it will grow at a rate of 1% per year. The NPV of this income stream equals $170.20. What is your discount rate? Provide your answer as percentage with two decimals, e.g., 1.23% (or 0.0123)

Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter5: Investment Decisions: Look Ahead And Reason Back
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Economics
Assume will get 20 rental payments paid over
20 years at the beginning of each year. Initially, the
rent equals R=$12; but it will grow at a rate of 1%
per year. The NPV of this income stream equals
$170.20. What is your discount rate? Provide your
answer as percentage with two decimals, e.g.,
1.23% (or 0.0123)
you
Transcribed Image Text:Economics Assume will get 20 rental payments paid over 20 years at the beginning of each year. Initially, the rent equals R=$12; but it will grow at a rate of 1% per year. The NPV of this income stream equals $170.20. What is your discount rate? Provide your answer as percentage with two decimals, e.g., 1.23% (or 0.0123) you
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