How much is the house worth

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Problem 1: You inherited a run-down house in Chicago. There is an active market in properties of this type, and similar properties currently sell for $100,000. If rented, the property can deliver cash returns of $12,000 per year forever. If the appropriate discount rate is 15 percent, how much is the house worth?

A) $150,000

B) $180,000

C) $80,000

D) $100,000

Reference no: EM132791359

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