Question
Bob and Jim are both looking to purchase the same house that costs $500,000. Bob plans to make a 10% down payment and take a
Bob and Jim are both looking to purchase the same house that costs $500,000. Bob plans to make a 10% down payment and take a $450,000 mortgage for the rest of the payment (mortgage cost is 5% annually). Jim wants to purchase the house for $500,000 cash today.
Required
Who will realize a higher return on investment if they sell the house for $550,000 a year from today? Show your calculations
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Engineering economy
Authors: Leland Blank, Anthony Tarquin
7th Edition
9781259027406, 0073376302, 1259027406, 978-0073376301
