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A retail shopping center is purchased for $2.1 million. During the next five years, the property...

A retail shopping center is purchased for $2.1 million. During the next five years, the property appreciates at 2 percent per year. At the time of purchase, the property is financed with a 70 percent loan-to-value ratio for 25 years at 6 percent (annual) with monthly amortization. At the end of year 5, the property is sold with 4 percent selling expenses. What is the before-tax equity reversion?

Question 18 options:

a)

$804,182

b)

$826,937

c)

$860,182

d)

$870,581

e)

$903,825

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Expert Solution

jeff jeffy answered 4 months ago
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