Purchase Solution

# Net Positive Value Apartment Building Value Calculation

Not what you're looking for?

You buy (t=0) an apartment building for \$500,000. You expect to earn \$40,000 a year in rent for the following 3 years (t=1-3). Then, at the end of year 3, you expect to sell the building for \$550,000. The required rate of return for this sort of investment is 10%. The risk-free rate is 5%. Clearly show how you would calculate is the NPV of the investment by hand (not excel)?

##### Solution Summary

The net positive value apartment for building value calculations are provided.

##### Solution Preview

CF0 = initial investment = -\$500,000
For t = 1 to 2,
CF1 = \$40,000
CF2 = \$40,000
At t = 3, CF3 = 550,000+40,000 ...

##### Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.

##### Motivation

This tests some key elements of major motivation theories.

##### Income Streams

In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.

##### Operations Management

This quiz tests a student's knowledge about Operations Management

##### Introduction to Finance

This quiz test introductory finance topics.