Real Estate Math
A Vermont real estate investment produces a cash-on-cash return of 8% on an equity investment of $75,000. What is the annual pre-tax cash flow?
A$5,000
B$6,000✓ Correct
C$7,500
D$8,000
Explanation
Cash-on-cash return = Annual Cash Flow / Equity Invested. $75,000 x 8% = $6,000 annual pre-tax cash flow.
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