An apartment building in your neighborhood is forsale for
Chapter , Problem 7-54(choose chapter or problem)
An apartment building in your neighborhood is forsale for $140,000. The building has four units, whichare rented at $500 per month each. The tenantshave long-term leases that expire in 5 years. Main-tenance and other expenses for care and upkeep are$8000 annually.A new university is being built in thevicinity and it is expected that the building could besold for $160,000 after 5 years.(a)What is the internal rate of return for this invest-ment?(b)Should this investment be accepted if the otheroptions have a rate of return of 12%?
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