question archive You and your investor group invested $5,000,000 to acquire THE REMINGTON, a small boutique apartment complex in Austin
You and your investor group invested $5,000,000 to acquire THE REMINGTON, a small boutique apartment complex in Austin
Subject:FinancePrice: Bought3
You and your investor group invested $5,000,000 to acquire THE REMINGTON, a small boutique apartment complex in Austin. After the purchase,THE REMINGTON produced a Before Tax Cash Flow (BTCF) of $900,000 in year 1. The project's BTCF increased by 4.5% in year 2 (over the year 1 level) and increased by 2% in year 3 (over year 2 level), but decreased by 2.5% in year 4 (over year 3 level), and was unchanged (from the year 4 level) in year 5. You then sold THE REMINGTON at the end of year 5 for $7,000,000. Determine the net present value of the cash flow stream (taking into account your initial investment in the property) if your investors' required return is 18% per annum. O $607,066 © $973,066 O $1,018,772 0 $1,094,980
