Question
An investor is considering a real estate investment that costs $790,000. It is expected to produce cash flows of 5% of the investment amount (i.e.,
An investor is considering a real estate investment that costs $790,000. It is expected to produce cash flows of 5% of the investment amount (i.e., $39,500) each year for the next 5 years. The investor believes that the property can be sold for $990,000 at that time. If their required rate of return is 12%, what is the NPV on this investment?
An investor is considering a real estate investment that costs $790,000. It is expected to produce cash flows of 5% of the investment amount (i.e., $39,500) each year for the next 5 years. The investor believes that the property can be sold for $990,000 at that time. If their required rate of return is 12%, what is the NPV on this investment?
-$81,226
-$59,045
-$76,660
-$85,859
-$73,348
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Risk Management And Financial Institutions
Authors: John C. Hull
3rd Edition
1118269039, 9781118269039
