Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

There is a duplex for sale in Absecon for $700,000 at this time. It has 2 units that generate a total of $25,000 in gross

There is a duplex for sale in Absecon for $700,000 at this time. It has 2 units that generate a total of $25,000 in gross rent. The property taxes are $4,000, commercial property insurance is $2,000, flood insurance is $1,000, and annual maintenance is $2,000. You expect to sell it in one year at a price growth of 0%. What is the NPV with a WACC of 10%. Is the IRR greater or less than the WACC? Would you invest in this project and why?

Thanks!

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finance Of International Trade

Authors: Eric Bishop

1st Edition

0750659084, 978-0750659086

More Books

Students also viewed these Finance questions

Question

develop ideas for a research project;

Answered: 1 week ago