$10\mathrm{.}3$ You are considering constructing a luxury

apartment building project that requires an invest$-$

ment of $$15,500,000,$ which comprises $$12,000,000$

for the building and $$3,500,000$ for land. The build$-$

ing has $50$ units. You expect the maintenance cost for

the apartment building to be $$350,000$ the first year

and $$400,000$ the second year, after which it will con$-$

tinue to increase by $$50,000$ in subsequent years. The

cost to hire a manager for the building is estimated

to be $$85,000$ per year. After five years of operation,

the apartment building can be sold for $$17,000,000.$

What is the annual rent per apartment unit that will

provide a return on investment of $15\%$ after tax?

Assume that the building will remain fully occupied

during the five years. Assume also that your tax rate

is $35\%.$ The building will be depreciated according

to $39-$year MACRS and will be placed in service in

January during the first year of ownership and sold in

December during the fifth year of ownership.

$(THISIS$ DATA FROM PROBLEM $10\mathrm{.}3DO$ NOT SOLVE $10\mathrm{.}3$ OLNY USE $IT$ FOR DATA$)$