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Consider the information in the table below. What is the marginal rate of return for keeping the property one additional year? If sold today If
Consider the information in the table below. What is the marginal rate of return for keeping the property one additional year?
| If sold today | If sold next year | ||||||
| Sale price | $ | 2,500,000 | $ | 2,650,000 | |||
| Mortgage balance | 1,000,000 | 900,000 | |||||
| Capital gain tax | 112,500 | 135,000 | |||||
| Cash flow | $ | 1,387,000 | $ | 1,615,000 | |||
| NOI over next year | $ | 50,000 | |||||
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Fundamentals Of Corporate Finance
Authors: Richard A. Brealey, Marcus, Alan J, Myers, Stewart C.
2nd Edition
0070074860, 9780070074866
