A retail shopping center is purchased for $2.1 million. During the next four years, the property appreciates

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A retail shopping center is purchased for $2.1 million. During the next four years, the property appreciates at 4 percent per year. At the time of purchase, the property is financed with a 75 percent loan-to-value ratio for 30 years at 8 percent (annual) with monthly amortization. At the end of year 4, the property is sold with 8 percent selling expenses. What is the before-tax equity reversion?


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Introduction to Operations Research

ISBN: 978-1259162985

10th edition

Authors: Frederick S. Hillier, Gerald J. Lieberman

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