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a. suppose that your required rate of return on a duplex is 12 percent. you are shown one such property which has a n asking
a. suppose that your required rate of return on a duplex is 12 percent. you are shown one such property which has a n asking price of 30000. the sales representative shows you the following cash flow projections for a holding period of 6 years
year | cash flow |
1 | 4500 |
2 | 5000 |
3 | 6000 |
4 | 3000 |
5 | 8000 |
6 | 20000 |
should you buy the investment? what would your expected rate of return?
b. what is the net present value of the duplex investment if the asking price is 28000 and your required rate of return is 12 percent? 10 percent? 15 percent?
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