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How much would I pay for the motel to earn 20% on my investment ?? 58) You have noticed an ad listing a motel for

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How much would I pay for the motel to earn 20% on my investment ??

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58) You have noticed an ad listing a motel for sale. After doing some research, you estimate that the 20 rooms can be rented for $60 per day with an occupancy rate of 80% per year. You have found a management company that will run the motel and take care of daily housekeeping for 10% of the rents. You estimate that repairs and maintenance costs will be $3,000 per month and that other cash expenses will be $4,000 per month. You plan to setl the motel at the end of the third year for $500,000. How much would you pay for the motel to earn A. $231,360 $ 776,708 c. $289,360 D. $487,356 E. None of the above

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