1. How much would you pay to participate in a real estate project that pays nothing for the first 10 years and $2,500 for the following 10 years if you can earn 13% return on other investments of similar risk?
2. If your tenant pays you rent of $24,000 a year for 10 years, what is the present value of the series of payments discounted at 10% annually?
3. You own a security with the cash flows shown below. 0 1 2 3 4 0 630 360 220 280 If you require an annual return of 12%, what is the present value of this cash flow stream?