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Northern Rock is a Grade A building in Manchester with acquisition price: 3,100,000. Potential rental income of Grade A buildings is: 180,000. Investor A

Northern Rock is a Grade A building in Manchester with acquisition price:  3,100,000. Potential rental income

Northern Rock is a Grade A building in Manchester with acquisition price: 3,100,000. Potential rental income of Grade A buildings is: 180,000. Investor A chose to acquire the property without leverage W2 is a Grade B building having the same area in square feet as Northern Rock with acquisition price: 3,000,000. Potential rental income of Grade B buildings is 100,000. Investor B chose to acquire the property with a 50% interest only non-amortized loan at 8.5% interest rate from HSBC and made some refurbishment to upgrade the property into Grade A office. Refurbishment cost: E 30,000. After one year, resale prices (anticipated): 3,200,000 for Grade A and 3,100,000 for Grade B What is the total return for Investors A and B respectively?

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