An apartment building in your neighborhood is for sale for $175,000. The building has four units, which are rented at $550 per month each. The tenants have long-term leases that expire in 7 years. Maintenance and other expenses for care and upkeep are $9500 annually. A new university is being built in the vicinity and it is expected that the building could be sold for $198,000 after 7 years. What is the internal rate of return for this investment?

An apartment building in your neighborhood is for sale for $175,000. The building has four units, which are rented at $550 per month each. The tenants have long-term leases that expire in 7 years. Maintenance and other expenses for care and upkeep are $9500 annually. A new university is being built in the vicinity and it is expected that the building could be sold for $198,000 after 7 years. What is the internal rate of return for this investment?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 22P

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