problem 2 You own a building that you plan on leasing to a businessman for $60,000 per year for three years. You estimat
Posted: Sun Jul 03, 2022 6:50 am
problem 2You own a building that you plan on leasing to a businessman for $60,000 per year for three years. You estimate the annual explicit cost and implicit cost of maintaining the building at $10,000, and $20,000 respectively. All revenues are received, and costs borne, at the end of each year. Suppose the interest rate is 5 percent.
a. Determine the present value of the stream of your accounting profits.
b.Determine the present value of the stream of your economic profits.
a. Determine the present value of the stream of your accounting profits.
b.Determine the present value of the stream of your economic profits.