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A house worth $ 5 5 0 k is expected to earn $ 7 0 k pa gross rent revenue and incur rental costs of
A house worth $k is expected to earn $k pa gross rent revenue and incur rental costs of $k pa over the next year. Note that the units kGreek kilo represent thousands. Assume that these cash flows are expected one year from now, so theyre received and paid annually in arrears. If the gross rent revenue and costs increase by per annum note the negative sign and houses can be valued as a perpetuity, what is the internal rate of return IRR of this house asset? Ignore taxes.
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