Question: Problem 5-11 Present Values (LO2) You can buy property today for $2.5 million and sell it in 7 years for $3.5 million. (You earn no

Problem 5-11 Present Values (LO2)

You can buy property today for $2.5 million and sell it in 7 years for $3.5 million. (You earn no rental income on the property.)

a. If the interest rate is 7%, what is the present value of the sales price? (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.)

b. Is the property investment attractive to you?

c-1. What is the present value of the future cash flows, if you also could earn $150,000 per year rent on the property? The rent is paid at the end of each year. (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.)

c-2. Is the property investment attractive to you now?

a. Present value

b.is the property investment attractive to you?

c-1. Present value

c-2. Is the property investment attractive to you now?

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