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Question
Consider the information in the table below. What is the marginal rate of return for keeping the property one additional year?
| If sold today | If sold next year | ||||||||
| Sale price | $ | 2,500,000 | $ | 2,650,000 | |||||
| Mortgage balance | 1,000,000 | 900,000 | |||||||
| Capital gain tax | 112,500 | 135,000 | |||||||
| Cash flow | $ | 1,387,000 | $ | 1,615,000 | |||||
| NOI over next year | $ | 50,000 | |||||||
A) 16.4%
B) 20.0%
C) $50,000
D) $277,500
Answer
This answer is hidden. It contains 19 characters.
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