Net Present Value Analysis:

You have found a residential complex that has been vacated. It will cost you $5m. You decide that it will cost you $1m to repair and will take one year (payable end of year 1). At the end of year 1 you will have the complex half full giving a positive cash flow of $500,000 p.a. from year 2 (receivable from the end of year 2). And after one more year it will be full, giving you a positive cash flow of $1m p.a. from year 3 (receivable from the end of year 3 onwards). The lease expires (therefore project ends) in 10 years. Lease cost is $100,000 p.a. (payable at the end of each year). All amounts are payable / receivable at the end of each year. The relevant interest rate is 7% p.a. Draw a NPV time line and put the numbers on the time line?

It's leased.