You are considering a luxury apartment building project that requires an investment of $12,500,000. The building has 50 units. You expect the maintenance cost for the apartment building to be $250,000 in the first year, $300.000 in the second year, and increasing by $50,000 in subsequent years. The cost to hire a manager for the building is estimated to be $80,000 per year. After five years of operation, the apartment building can be sold for $14,000,000. What is the annual rent per apartment unit that will provide a return on investment of 15% per year? Assume the building will remain fully occupied during the five years.(a) $36,445(b)$38,567(c) $41,373(d) $44,980
You are considering a luxury apartment building project that requires an investment of $12,500,000. The building has 50 units. You expect the maintenance cost for the apartment building to be $250,000 in the first year, $300.000 in the second year, and increasing by $50,000 in subsequent years. The cost to hire a manager for the building is estimated to be $80,000 per year. After five years of operation, the apartment building can be sold for $14,000,000. What is the annual rent per apartment unit that will provide a
(a) $36,445
(b)$38,567
(c) $41,373
(d) $44,980
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
