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Answer the following question correctly please The following question is simply for reference and has an infographic. Please use this question and give the correct
Answer the following question correctly please
The following question is simply for reference and has an infographic. Please use this question and give the correct answer. It is the same question with slightly different numbers and it tells you what the correct answer is. Thank you!
A real estate investor likes to "flip" houses. That is, he likes to buy a house at a low price and then "flip" or sell the house for a higher price. The investor is looking at a foreclosed house that will cost $244,289.00 today. He will invest an additional $49,847.00 in the first year of owning the house to upgrade its features. He then believes he can sell the house for $402,187.00 at the end of the second year. What is the NPV of this investment if our investor wants to earn a 14.00% annual return on the house? Answer format: Currency: Round to: 2 decimal places. A real estate investor likes to "flip" houses. That is, he likes to buy a house at a low price and then "flip" or sell the house for a higher price. The investor is looking at a foreclosed house that will cost $244,926.00 today. He will invest an additional $41,475.00 in the first year of owning the house to upgrade its features. He then believes he can sell the house for $408,465.00 at the end of the second year. Correct Answer: \$27,867.01 What is the NPV of this investment if our investor wants to earn a 15.00% annual return on the house? Points: 0 Answer format: Currency: Round to: 2 decimal places. Attempts Remaining: Infinity A real estate investor likes to "flip" houses. That is, he likes to buy a house at a low price and then "flip" or sell the house for a higher price. The investor is looking at a foreclosed house that will cost $230,000 today. He will invest an additional $50,000 in the first year of owning the house to upgrade its features. He then believes he can sell the house for $400,000 at the end of the second year. What is the NPV of this investment if our investor wants to earn a 20% annual return on the house? NPV=(1+r)1FCF1+(1+r)2FCF2+FCF0NPV=(1.20)1$50,000+(1.20)2$400,000$230,000=$6,111.11 USING FINANCIAL CALCULATOR: CF0=230000,C01=50000,C02=400000,I=20,CPTNPV=6111.11 USING EXCELStep by Step Solution
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