Question
You have a building with 8 apartments. The construction cost of the building is 4 million QAR. The annual rent for each is 150,000 QAR/year.
You have a building with 8 apartments. The construction cost of the building is 4 million QAR. The annual rent for each is 150,000 QAR/year. You rent the apartments using 7 years contracts. a. If all your customers deposit the rental amounts in the bank over the 7 years of their contracts, and that banks reward deposits with 6% annually, what is the amount you will find at maturity? b. Whats the present value of all the contracts? c. If you want to sell the building with a 25% profit margin applied to the construction cost to which you add the present value of the apartments, what would be the minimum price you would accept to seal the deal? d. What would be the minimum price you would accept if two apartments are vacant?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started