What is reasonable asking price for this shopping center

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Reference no: EM132048150

1. Rafael Sandino is interested in investing in a shopping center that has been in operation for 10 years. The forecasted cash flows for the next 5 years are as follows: losses of $4,000 monthly for the first year, gains of $75,000 monthly for the next year, $80,000 monthly for the following 2 years, and $100,000 monthly for the fifth year. In the final month of the 5th year, Rafael is planning to sell the property for $2,500,000. What is a reasonable asking price for this shopping center? Find the net present value (NPV). Assume money is worth 2.8% compounded monthly. Round to the nearest thousand.

2. You purchased 100 shares of corporate stock 9 years ago for $12.65 per share, plus brokerage fees of $85. You received dividends of 35 cents per share at the end of each quarter. Immediately after receiving your 36th dividend, you sold your stock for $11.18 per share, less brokerage fees of $70. Calculate your rate of return. Round to the nearest tenth of a percent.

Reference no: EM132048150

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