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You are an investor with 12 million cash to invest. You wish to purchase an office building with this of the same city. The following

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You are an investor with 12 million cash to invest. You wish to purchase an office building with this of the same city. The following information is available regarding the three possible investments: Distance from the CBD (km) Floor space (square metres) . king price (GBP) Management costs (GBP per square metre per month) 1. Commercial rent in the central business district (CBD) is 60 per 5 the CBD. 2. Building 2 has been certified as complying with sustainability stand 3. A suitable discount rate for all areas is 6%. 4_ There is a fountain outside Building 1 that you can persuade the lo properties in the area have increased the rent charged per square 5_ The focal government will impose a 2% tax, by the time you compl with sustainability standards. Ignore the effects of any other taxes. Question 1 Calculate the net present value and internal rate of return of each building assuming that net operat pound and your calculated internal rate of return to two decimal places. Recommend, based on your calculations in Question 1.1, and purely from a financial perspective, w Question 2 Would your answer to Question 1.2 change if you were to finance the asking price of each building forever. Assume. once again, that the asking price of the building is financed with a 50% ioan-to-value mortg different parts of the city as they want to diversify their risk portfolio. Therefore. banks are willing to

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