You own a building that you plan on leasing to a businessman for $60,000 per year for three years. You estimate the annu

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answerhappygod
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You own a building that you plan on leasing to a businessman for $60,000 per year for three years. You estimate the annu

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You 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 cost borne at the end of each year. Suppose the interest rate is 5 percent.
Determine the present value of the stream of your accounting profits.
Determine the present value of the stream of your economic profits.
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