Finance 3  A property can be rented for 50.000 euros
finance iii
Task
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1. A property can be rented for 50.000 euros per year. We assume that it can last for many decades, with growing maintenance costs of 1% per year. For how much would you value it today if you want to obtain at least a profitability of 3% ?
2. Somebody acquires some shares that are expected to produce yearly cash inflows of 12.000 forever, but the first payment will start in 2 years. The profitability of these shares is a 2%. Calculate the value of these shares today.
3. You own a computer that will generate 1.700.000 bitcoins return over the coming year. The cost of producing the bitcoins is very small, as the energy consumed is generated with solar panels. The computer is anyhow a bit slower every year, and the volume of bitcoins produced is expected to decline at 1% per year. The discount rate is 3%. What is the PV of the computer and the bitcoin cashflows it produces?
4. How much money do you have to invest today for getting 9 yearly payments with an interest rate of 5% considering the first payment of 1.800 € will be made today and will be growing 1% yearly?
5 Your company has the opportunity to invest in a project that will generate cashflows of 10,000€ per year, starting in 4 years, and for 15 years.
Calculate how much you should invest today if you want to get a profitability of 3%
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Solution: Finance 3  A property can be rented for 50.000 euros