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An investment fund is evaluating the purchase of a property for $230,000. It is estimated that the property will produce net operating income of $21,000
An investment fund is evaluating the purchase of a property for $230,000. It is estimated that the property will produce net operating income of $21,000 per year for each of the next five (5) years. At the end of five (5) years, it is anticipated that the property will be sold and produce net sales proceeds of $325,000. Which of the following would be MOST LIKELY to occur if the fund's investors have a hurdle rate of fifteen percent (15%)? The investment fund would accept the deal only if the property's market value is greater than $230,000 A. The investment fund would accept the deal at the current price B. C. The investment fund would not accept the deal at the current price D. The investment fund would accept the deal only if the current price is reduced o O E. The investment fund would accept the deal only if the holding period were longer than five (5) years
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