A real estate developer is considering the construction of a new apartment complex. The developer estimates that the project will cost $5 million to build and that the complex will generate annual rental income of $1.2 million. The developer also expects to incur annual operating expenses of $300,000. The developer plans to finance the project using a 30-year mortgage with an interest rate of 5% per year. What is the developer's net present value of the project, assuming a discount rate of 8% per year?

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The detailed answer for the above question is provided below To calculate the net present value NPV of the project we first need to calculate the annu... View the full answer