1. Base your answers on the Loopnet listing for the property 44 Fort Greene Pl , Brooklyn, NY 11217.

Assume if I pay the current asking price and then must invest another $1 million dollars to renovate this property into 8 marketable condominiums that can be sold for $750,000 each. The project will take three years to complete. At the end of three years I will sell each unit for $750,000. My cash flows in year 1 and 2 will be minus $200,000. Would you advise me to make the investment? I have told you that I will am only interested in the development of this property if the net present value of the project is positive when a discount rate of 20 percent is used.

time	cashflow
0	-3,390,000.00
1	-200,000
2	-200,000
3	6,000,000.00	8 units x $750,000

Choose True if you advise to invest

Choose False if you advise not to invest

True

False