An apartment property that will be held for 10 years has the following forecasted cash flows before taxes: 1 2 2,619 2,604 2,594 2,587 2,581 It is expected that the end of year 10 sales proceeds before taxes will be $39,697. How much initial investment can an equity investor pay for the equity portion if the investor requires a 15-percent, before-tax return? 3 4 $ 5 2,760 2,720 2,686 2,659 2,636 $13,387 O $23,199 $88,400 EOP O $90,500 6 7 8 9 $ 10

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
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Question
An apartment property that will be held for 10 years has the following forecasted cash flows before
taxes:
1
2
3
4
$
5
2,760
2,720
2,686
2,659
2,636
$13,387
$23,199
$88,400
EOP
$90,500
6
7
8
9
10
2,581
It is expected that the end of year 10 sales proceeds before taxes will be $39,697. How much initial
investment can an equity investor pay for the equity portion if the investor requires a 15-percent,
before-tax return?
$
2,619
2,604
2,594
2,587
Transcribed Image Text:An apartment property that will be held for 10 years has the following forecasted cash flows before taxes: 1 2 3 4 $ 5 2,760 2,720 2,686 2,659 2,636 $13,387 $23,199 $88,400 EOP $90,500 6 7 8 9 10 2,581 It is expected that the end of year 10 sales proceeds before taxes will be $39,697. How much initial investment can an equity investor pay for the equity portion if the investor requires a 15-percent, before-tax return? $ 2,619 2,604 2,594 2,587
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