Estimate the cost of capital to finance your investment

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Reference no: EM132126137

Mini Case Assignment -

Problems - Use internet to identify a house or condo that you may be interested in investing as a rental property for 10+ years. (Suggested price range between $250k - $1 million)

1. Estimate the annual rent, annual expenses (maintenance, property tax, insurance, etc), depreciation, closing cost, net working capital, future home selling price (=salvage value), and any incremental cash flow that may be incurred by your investment.

2. Estimate the annual cash flows for year 0, 1, 2, ... till the year you expect to sell the property.

3. Estimate the cost of capital to finance your investment. (assume you put a 20% cash down payment and get a mortgage loan for the rest 80%)

4. Calculate the net present value of the investment and comment whether the rental property you choose is a good investment or not.

5. Discuss the pros and cons of rental property investing.

Make/state assumptions, when needed.

Attachment:- Assignment File.rar

Reference no: EM132126137

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Reviews

len2126137

9/29/2018 12:30:42 AM

Please check the assignment very carefully and let us know if you will be able to complete the assignment with good quality and within the deadline. Let us know if you have any confusion or unable to understand any part of the requirement so that it can be clarified with the student. You may be charged for a penalty in case of delayed or plagiarized solutions. Please DO NOT start working on the assignment before it is confirmed to you through email.

len2126137

9/29/2018 12:30:34 AM

Read all the instructions carefully before starting the work and follow them while solving the assignment. Note: If solutions are not posted as per given deadline, late submission penalty would be applied. For the mini case this is how I need it done plz. Submit a Word file with embedded Excel spreadsheet showing your calculation. If you don’t know how to embed, screen capture the spreadsheet and add to your Word file. Notes - For NPV calculation, review Module 1. For estimating cash flows, review Module 2. For estimating cost of capital, review Module 3-5. Make/state assumptions, when needed.

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