Question: 6 . 1 1 Sylvia has received a ( $ 5 0 0 , 0 0 0 ) inheritance from her favorite,
Sylvia has received a $ inheritance from her favorite, recently deceased aunt in Hawaii. Sylvia is planning to purchase a condo in Hawaii in the same area where her aunt lived all her life and to rent it to vacationers. She hopes to make per year on this purchase over an ownership period of years. The condo's total first cost is $ and she conservatively expects to sell it for of the purchase price. No annual M&O costs are considered in the analysis. a What is the capital recovery amount? b If there is a real boom in rental real estate years in the future, what sales price as a percentage of original purchase price is necessary at that time year to realize the same amount as the return expected over the year ownership period?
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