Problem I Note: Unexplained answers will NOT be graded You own a building that you plan on leasing to a businessman for

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Problem I Note Unexplained Answers Will Not Be Graded You Own A Building That You Plan On Leasing To A Businessman For 1 (10.62 KiB) Viewed 11 times

Problem I Note: Unexplained answers will NOT be graded 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 in $20,000, and $10,000 respectively. All revenues are received, and costs borne, at the end of each year. Suppose the interest rate is 2.5 percent 1. Determine the present value of the stream of your accounting profits 2. Determine the present value of the stream of your economic profits