Your friend is considering buying a property for Sh, 50,000. If purchased the property will be financed 60% by debt at 15% p.a. payable monthly for 5 years. The property will generate NOI of Sh, 5,000 and Sh, 8,000 in year 1 and 2 respectively. The property can be sold for Sh, 60,000 at the end of year 2. The required rate of return is 25%. Calculate the BTIRR and advise.
Your friend is considering buying a property for Sh, 50,000. If purchased the property will be financed 60% by debt at 15% p.a. payable monthly for 5 years. The property will generate NOI of Sh, 5,000 and Sh, 8,000 in year 1 and 2 respectively. The property can be sold for Sh, 60,000 at the end of year 2. The required rate of return is 25%. Calculate the BTIRR and advise.
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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Your friend is considering buying a property for Sh, 50,000. If purchased the property will be financed 60% by debt at 15% p.a. payable monthly for 5 years. The property will generate NOI of Sh, 5,000 and Sh, 8,000 in year 1 and 2 respectively. The property can be sold for Sh, 60,000 at the end of year 2. The required
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