Question: 6 . 1 1 Sylvia has received a ( $ 5 0 0 , 0 0 0 ) inheritance from her favorite,

6.11 Sylvia has received a \(\$ 500,000\) 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 \(8\%\) per year on this purchase over an ownership period of 20 years. The condo's total first cost is \(\$ 500,000\), and she conservatively expects to sell it for \(90\%\) 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 10 years in the future, what sales price (as a percentage of original purchase price) is necessary at that time (year 10) to realize the same amount as the \(8\%\) return expected over the 20-year ownership period?
6 . 1 1 Sylvia has received a \ ( \ $ 5 0 0 , 0 0

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