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Real Estate Principles 3rd Edition by David Ling,Wayne Archer
Edition 3ISBN: 978-0073377322Real Estate Principles 3rd Edition by David Ling,Wayne Archer
Edition 3ISBN: 978-0073377322 Exercise 19
Assume a property is priced at $5,000 and has the following income stream:
Would an investor with a required rate of return of 15 percent be wise to invest at the current price
A) No, because the project has a net present value of $1,139.15.
B) No, because the project has a net present value of $1,954.91.
C) Yes, because the project has a net present value of $1,069.66.
D) Yes, because the project has a net present value of $1,954.91.
E) An investor would be indifferent between purchasing and not purchasing the above property at the stated price.
Would an investor with a required rate of return of 15 percent be wise to invest at the current priceA) No, because the project has a net present value of $1,139.15.
B) No, because the project has a net present value of $1,954.91.
C) Yes, because the project has a net present value of $1,069.66.
D) Yes, because the project has a net present value of $1,954.91.
E) An investor would be indifferent between purchasing and not purchasing the above property at the stated price.
Explanation
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Verified
The correct answer is option B. No, beca...
Real Estate Principles 3rd Edition by David Ling,Wayne Archer
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