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Assume that we have a commercial real estate property whose projected 5-year cash flows are the following: Year -1: -$50 Year 0: -$100 Year 1:
Assume that we have a commercial real estate property whose projected 5-year cash flows are the following:
- Year -1: -$50
- Year 0: -$100
- Year 1: $20
- Year 2: $25
- Year 3: $30
- Year 4: $35
- Year 5: $140
Assuming a discount rate of 2%. Assume further that the first years annual debt service is $5.
Given that the prevalent market cap rate at current time is 10%, what is the development profit?
Group of answer choices
$49
$52
$849
$852
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