A)Dan's real estate buys a 50,000 sq foot warehouse for $1,000,000. They financed the purchase with 100% Equity and 0% Debt. After 3 years they sold the warehouse for $2,000,000. What is Dan's net profit? What is the project’s equity multiplier?
A)Dan's real estate buys a 50,000 sq foot warehouse for $1,000,000. They financed the purchase with 100% Equity and 0% Debt. After 3 years they sold the warehouse for $2,000,000. What is Dan's net profit? What is the project’s equity multiplier?
Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
7th Edition
ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Chapter13: Investing In Mutual Funds, Etfs, And Real Estate
Section: Chapter Questions
Problem 9FPE
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A)Dan's real estate buys a 50,000 sq foot warehouse for $1,000,000. They financed the purchase with 100% Equity and 0% Debt. After 3 years they sold the warehouse for $2,000,000.
What is Dan's net profit?
What is the project’s equity multiplier?
B) Dan's Real Estate buys a 50,000 sq ft warehouse for $1,000,000. They financed the purchase with $250,000 Equity and a $750,000 Loan from the Bank at a 10% annual non-compounding interest rate. After 3 years they sell the building for $2,000,000
What is Dan's net profit?
What is the project’s equity multiplier?
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