An investor finances a $4,000,000 project with 80% debt and 20% equity. The interest payment due on

Question:

An investor finances a $4,000,000 project with 80% debt and 20% equity. The interest payment due on the debt in year one is 8%. The investor achieves a net operating income of $600,000 from the project in year one. What is this investor’s equity ROI on the project in year one?

a. 43%

b. 45%

c. 39%

d. 41%