Suppose that your required rate of return on a condo is 12 percent. You are shown one such property, which has an asking price of $150,000. The sales representative shows you the followin g cash flow projections for a holding period of 6 years:
Year (N) Cash flow
1.) $22,500
2.) 25,000
3.) 30,000
4.) 15,000
5.) 40,000
6.) 100,000
Should you buy the investment? What would be your expected rate of return?