An investor buys a land for PhP 1M and constructs a three-door apartment for students worth PhP 5M. He estimates that the annual receipts from the apartment to be PhP 1.2M and annual expenses to cover taxes, insurance, and maintenance of the apartment to be PhP 100,000. He also estimates that the land can be sold for PhP 3M at the end of 10 years. If his money is now earning 8% interest before taxes, will this property earn enough for the investment to be justified? Use IRR metho
An investor buys a land for PhP 1M and constructs a three-door apartment for students worth PhP 5M. He estimates that the annual receipts from the apartment to be PhP 1.2M and annual expenses to cover taxes, insurance, and maintenance of the apartment to be PhP 100,000. He also estimates that the land can be sold for PhP 3M at the end of 10 years. If his money is now earning 8% interest before taxes, will this property earn enough for the investment to be justified? Use IRR metho
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 investor buys a land for PhP 1M and constructs a three-door apartment for students
worth PhP 5M. He estimates that the annual receipts from the apartment to be PhP 1.2M
and annual expenses to cover taxes, insurance, and maintenance of the apartment to be
PhP 100,000. He also estimates that the land can be sold for PhP 3M at the end of 10
years. If his money is now earning 8% interest before taxes, will this property earn enough
for the investment to be justified? Use IRR metho
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