Real Estate Math
A Michigan investor wants a 10% cash-on-cash return. They invest $80,000 in cash. What must the annual before-tax cash flow be?
A$6,000
B$8,000✓ Correct
C$10,000
D$12,000
Explanation
Cash-on-cash return = Annual Cash Flow / Cash Invested. Required cash flow = 10% x $80,000 = $8,000.
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