LLONOMICS and Finance M5U2 Activity Submission... Saved to this PC v . Home Insert Draw Page...

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LLONOMICS and Finance M5U2 Activity Submission... Saved to this PC v . Home Insert Draw Page Layout Formulas Data Review View Help X Arial 10.5- A A ab Wrap Text General D BIU H Merge & Center ~ $ % % 900-00 Conditiona Formatting ard Z Font 2 Alignment Number 2 XVfx Reflecting on what you learnt in Modules 1 and 2, and based on the information provided for City A and City B C D E F G TOTAL: 3. Questions H Question 1 You are interested in purchasing a residential apartment block as a long-term investment. You have identified two identical apartment blocks in two different cities: City A and City B. The discount rate for an asset with the same level of risk is 6%. The following information is also relevant: Expected annual growth in net operating income (NOI) Years 2-10: Terminal growth rate (post-Year 10): Rent income Year 1: Maintenance expense Year 1 (Maintenance cost exists every year; this given value is only for Year 1) Purchase price: Discount rate: 3 4 5 96 97 Calculate the net present value of each potential investment. Round your answers to the nearest pound. (Answer the question in the corresponding area of the Answer sheet) 12 3 1,60 Question 2 Reflecting on what you learnt in Modules 1 and 2, and based on the information provided for City A and City B in the table in Question 1, which e Assume that growth in demand is the same for both cities. Limit your answer to 150 words. (Answer the question in the corresponding area of the Answer sheet) Instructions Answer sheet + Ready Accessibility: Investigate 61F Mostly cloudy Esc FnLock YA F1 AI F2 + # F3 X Search F4 F5 $ St % F6 F7 + F8 FS LLONOMICS and Finance M5U2 Activity Submission... Saved to this PC v . Home Insert Draw Page Layout Formulas Data Review View Help X Arial 10.5- A A ab Wrap Text General D BIU H Merge & Center ~ $ % % 900-00 Conditiona Formatting ard Z Font 2 Alignment Number 2 XVfx Reflecting on what you learnt in Modules 1 and 2, and based on the information provided for City A and City B C D E F G TOTAL: 3. Questions H Question 1 You are interested in purchasing a residential apartment block as a long-term investment. You have identified two identical apartment blocks in two different cities: City A and City B. The discount rate for an asset with the same level of risk is 6%. The following information is also relevant: Expected annual growth in net operating income (NOI) Years 2-10: Terminal growth rate (post-Year 10): Rent income Year 1: Maintenance expense Year 1 (Maintenance cost exists every year; this given value is only for Year 1) Purchase price: Discount rate: 3 4 5 96 97 Calculate the net present value of each potential investment. Round your answers to the nearest pound. (Answer the question in the corresponding area of the Answer sheet) 12 3 1,60 Question 2 Reflecting on what you learnt in Modules 1 and 2, and based on the information provided for City A and City B in the table in Question 1, which e Assume that growth in demand is the same for both cities. Limit your answer to 150 words. (Answer the question in the corresponding area of the Answer sheet) Instructions Answer sheet + Ready Accessibility: Investigate 61F Mostly cloudy Esc FnLock YA F1 AI F2 + # F3 X Search F4 F5 $ St % F6 F7 + F8 FS