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QUESTION

A cottage is for sale for $580,000. Currently it generates annual cash flows, net of all expenses and taxes, of $35,000.

A cottage is for sale for $580,000. Currently it generates annual cash flows, net of all expenses and taxes, of $35,000. If the cottage lasts forever, what rate of growth of the annual cash flows will be necessary for you to earn an 8% annual rate of return on your investment?

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