An English Training Center opens a new business branch in the property sector and is interested opened
Question:
An English Training Center opens a new business branch in the property sector and is interested opened a boarding house in the East Coast area.
This project requires an investment of an initial amount of 5 billion to buy ready-made properties, with 25 boarding rooms.
visible occupancy rate (rented room rate) is 80% and rental income is 3 million per month.
If the cost of electricity and water is 20 million per year, then calculate:
- Earnings before tax per year
- Profit after tax per year, tax rate = 20%
- Payback period (how many years payback)
When it runs after 10 years, the property sells for 3 billion, and interest at this time is 12%, then determine:
- Net value now
- Internal Rate of Return
- Profitability index
Financial Management Principles and Applications
ISBN: 978-0133423822
12th edition
Authors: Sheridan Titman, Arthur Keown, John Martin