Your Investment rule is to only buy triple net lease properties that offer a positive NPV when the net operating income and sale of property is discounted back to the present at a 15% cost of capital. In other words, the discount rate you use in your calculations is 15%, Assume that you will pay the asking price. Your investment horizon is 15 years. At the end of 15 years you expect to sell the property for 30% more than you paid. Ignore taxes on capital gains. The price is $2 million. NOI is $400,000 per year for 15 years.

You should invest in the property?

Answer rating: 100% (QA)

To determine if you should invest in the property we need to calculate the net present value NPV of ... View the full answer