A ten unit apartment building has an annual $60,000 cash flow (similar to dividend when looking...
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A ten unit apartment building has an annual $60,000 cash flow (similar to dividend when looking at stocks). The investor thinks the end of year one cash flow will equal $60,000 times 1.025. The investor thinks these cash flows may grow at 2.5% per year. The investor wants to earn a 9% interest rate on this investment. Compute the possible apartment building value today. A ten unit apartment building has an annual $60,000 cash flow (similar to dividend when looking at stocks). The investor thinks the end of year one cash flow will equal $60,000 times 1.025. The investor thinks these cash flows may grow at 2.5% per year. The investor wants to earn a 9% interest rate on this investment. Compute the possible apartment building value today.
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To compute the possible apartment building value today we need to use the discounted cash flow DCF m... View the full answer
Related Book For
Engineering Economy
ISBN: 978-0132554909
15th edition
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Posted Date:
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