✏️ How to handle a "construction period" in the timing of cash flows

❔ The key thing to understand is that you only receive rent between $T=1$ and $T=2$. We will book the first rental income cash flow at $T=2$, because we tend to book income that accrues throughout the year at the end of the year (conservative assumptions & allows for a delay in collecting the money).

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At this point we will assume you can calculate NPV:

Because it is positive, we will take the project.