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Lisa expects a potential rental property investment to have gross revenue of $1,000,000 annually. She anticipates $150,000 in maintenance expense, $300,000 in salaries, $100,000 in
Lisa expects a potential rental property investment to have gross revenue of $1,000,000 annually. She anticipates $150,000 in maintenance expense, $300,000 in salaries, $100,000 in utilities, $200,000 in depreciation and a mortgage payment of $150,000. Her principal payment would be $50,000 and interest expense would be $100,000. How much should Lisa pay for the rental property if her required rate of return is 12%? A) $4,166,667 B) $3,750,000 C) $3,333,333 D) $2,916,667
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