Real Estate Math
A Minnesota investor wants a 10% cash-on-cash return. They plan to invest $80,000 in cash. How much annual cash flow must the property generate?
A$6,400
B$8,000✓ Correct
C$10,000
D$12,000
Explanation
Required annual cash flow = Cash invested x Desired return = $80,000 x 10% = $8,000. Cash-on-cash return = Annual pre-tax cash flow / Total cash invested.
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