You are considering purchasing | Accounting homework help

You are considering purchasing a house for investment purposes, with some of the purchase price paid for with a $25,000 down payment out of your own pocket and the rest paid for by borrowing from the bank. Your plan is to rent the house. You expect that for the next 30 years, while you are still paying off the mortgage on the house, the house will generate zero cash flow. The reason for this is that you expect the amount of rent you receive for the property to be exactly equal to the mortgage payment plus the amount you need to pay to maintain the home for each of the next 30 years.After 30 years from today, you will no longer have to make mortgage payments but will continue receiving rent and you will continue to need to maintain the house. Your analysis indicates that, once the mortgage is paid off, you should be able to generate the same annual cash flow each year from the house forever. For simplicity, assume that the first of these annual cash flows comes exactly 31 years from today, that the amount of each annual cash flow, ????, is the same, and that the cash flows come at the end of each year. The discount rate for this investment is 12% per year compounded annually. a) What is the lowest value of ???? that would make this a positive NPV project for you?In other words, how much annual cash flow would you need to expect the house to generate beginning in year 31 for this to be a good investment?Can this question be done using the TI-84 Plus Calculator?

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Order your essay today and save 20% with the discount code RESEARCH