Department Store Rents
NPV = -100 + +... + = $ 1 million
[assumes price of property appreciates by 3% a year]
Rental yield = 10 - 3 = 7%
NPV + +... + + = $1 million
8 8 + 134
1.10 1.10^108 - 7 8 - 7.21 8 - 8.87 8 - 9.13
1.10 1.10^2 1.10^9 1.10^10
barry
(Barry)
#1