Question
2. Rami is purchasing a retail center for R14 million. Expected first-year net operating income for this center is R1.25 million.Butcher's Finance will provide 25-year,
2.
Rami is purchasing a retail center for R14 million. Expected first-year net operating income for this center is R1.25 million.Butcher's Finance will provide 25-year, 8.75 percent fixed rate financing with monthly payments, a maximum loan-to value ratio of 80 percent, and a minimum debt-coverage ratio of 1.30. Based on these terms, what is the maximum loan amount Rami can expect?
A. R11,200,000
B. R9,746,254
C. R116,955,045
D. R10,136,104
E. R16,471,169
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Foundations Of Finance
Authors: Arthur J Keown, John D Martin, J William Petty
7th Edition
0133370356, 9780133370355
