An Investor Agreed to Sell a Warehouse 5 Years from Now

Multiple Choice

An investor agreed to sell a warehouse 5 years from now to the tenant who currently rents the space.The tenant will continue to pay $20,000 rent at the beginning of each year including year five in which he will purchase the building for an additional $150,000.Assuming the investor's required rate of return is 10%,how much is this deal presently worth to the investor who was willing to sell?

A) $168,953.93
B) $241,451.07
C) $363,678.50
D) $1,032,475.67