An apartment building in your neighborhood is for sale for $175,000. The building has four units, which are rented at $550 per month each. The tenants have long-term leases that expire in 7 years. Maintenance and other expenses for care and upkeep are $9500 annually. A new university is being built in the vicinity and it is expected that the building could be sold for $198,000 after 7 years. What is the internal rate of return for this investment?
An apartment building in your neighborhood is for sale for $175,000. The building has four units, which are rented at $550 per month each. The tenants have long-term leases that expire in 7 years. Maintenance and other expenses for care and upkeep are $9500 annually. A new university is being built in the vicinity and it is expected that the building could be sold for $198,000 after 7 years. What is the internal rate of return for this investment?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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An apartment building in your neighborhood is for sale for $175,000. The building has four units, which are rented at $550 per month each. The tenants have long-term leases that expire in 7 years. Maintenance and other expenses for care and upkeep are $9500 annually. A new university is being built in the vicinity and it is expected that the building could be sold for $198,000 after 7 years. What is the
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