Solve with complete solution and draw the cash flow diagram You purchased a building five years ago for $200,000. Its annual maintenance expense has been $15,000 per year. At the end of three years, you spent $55,000 on roof repairs. At the end of five years (now), you sell the building for $250,000. During the period of ownership, you rented out the building for $60,000 per year paid at the beginning of each year. If your MARR is 8% per year. a) Use the PW and AW methods to evaluate this investment. PW = $____ and AW = $____ b) Calculate IRR and ERR(( Ԑ=MARR). IRR = Blank ____% and ERR = Blank ____% Note: For equivalent worth, round off the final answer to whole number. For Rate of Return, round off to two decimal places (in percentage)
Solve with complete solution and draw the cash flow diagram
You purchased a building five years ago for $200,000. Its annual maintenance expense has been $15,000 per year. At the end of three years, you spent $55,000 on roof repairs. At the end of five years (now), you sell the building for $250,000. During the period of ownership, you rented out the building for $60,000 per year paid at the beginning of each year. If your MARR is 8% per year.
a) Use the PW and AW methods to evaluate this investment. PW = $____ and AW = $____
b) Calculate
Note: For equivalent worth, round off the final answer to whole number. For Rate of Return, round off to two decimal places (in percentage)
Step by step
Solved in 3 steps with 3 images