Real Estate Math
An investor requires a 12% return on investment. The property generates $24,000 annual cash flow after debt service. What is the maximum they should invest in equity?
A$24,000
B$200,000✓ Correct
C$288,000
D$120,000
Explanation
Maximum equity investment = Annual cash flow / Required return = $24,000 / 0.12 = $200,000.
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