Question
Consider a construction company is planning to build a tourism complex targeting tourists visiting North Cyprus. This tourism complex will be composed of 40 villas
Consider a construction company is planning to build a tourism complex targeting tourists visiting North Cyprus. This tourism complex will be composed of 40 villas and recreational areas for an estimated initial cost of about $2,430,000. The companys real estate manager is expecting to receive monthly rental payments of $950 per villa. For the entire business activities that is planned to take place in the proposed tourism complex, the real estate manager expects to pay approximately $15,000 of tourism revenue tax annually, and the technical works team assumes that for the entire tourism complex, there should be a maintenance every 3 years at an approximate cost of $11,500. Board of directors of the company are wondering, if the entire tourism complex is sold after 13 years of operation based on the aforementioned inflows and outflows for a cost of $2,100,000 what would be the annualized profit of this tourism complex if you consider discount rate as 10%?
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