Question: Mrs. Johnson is considering buying a property for ( $ 2,900,000 ) with estimated acquisition costs of ( $ 37,000 ). She plans to use

 Mrs. Johnson is considering buying a property for \\( \\$ 2,900,000

Mrs. Johnson is considering buying a property for \\( \\$ 2,900,000 \\) with estimated acquisition costs of \\( \\$ 37,000 \\). She plans to use \\( \\$ 2,000,000 \\) in debt financing which has loan costs of \\( \\$ 40,000 \\) and the annual debt service is \\( \\$ 185,333 \\). The forecast for year \\( 1 \\mathrm{NOI} \\) is \\( \\$ 250,000 \\). Mrs. Johnson's forecast cash on cash return for year one is: 4.68 percent 4.98 percent 5.32 percent 6.62 percent

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