You are considering the purchase of a nice home. It is in every way perfect for you

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You are considering the purchase of a nice home. It is in every way perfect for you and in excellent condition, except for the roof. The roof has only 5 years of life remaining. A new roof would last 20 years, but would cost \(\$ 20,000\). The house is expected to last forever. Assuming that costs will remain constant and that the interest rate is 5\%, what value would you assign to the existing roof?

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Investment Science

ISBN: 9780199740086

2nd Edition

Authors: David G. Luenberger

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