On a land worth P800,000, an investor constructs a building worth P3,000,000. The owner estimates that the annual receipts from rentals will be P720,000 and annual expenses to cover taxes, insurance and maintenance of the building will be P80,000. The investor estimates that the land can be sold for P1,200,000, the building for P2,000,000 at the end of 20 years. If his money is now earning 15%, compute the rate of return.
On a land worth P800,000, an investor constructs a building worth P3,000,000. The owner estimates that the annual receipts from rentals will be P720,000 and annual expenses to cover taxes, insurance and maintenance of the building will be P80,000. The investor estimates that the land can be sold for P1,200,000, the building for P2,000,000 at the end of 20 years. If his money is now earning 15%, compute the rate of return.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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On a land worth P800,000, an investor constructs a building worth P3,000,000. The owner estimates that the annual receipts from rentals will be P720,000 and annual expenses to cover taxes, insurance and maintenance of the building will be P80,000. The investor estimates that the land can be sold for P1,200,000, the building for P2,000,000 at the end of 20 years. If his money is now earning 15%, compute the
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