You Inherited a Run-Down House in Chicago

question 68

Multiple Choice

You inherited a run-down house in Chicago. There is an active market in properties of this type, and similar properties currently sell for $100,000. If rented, the property can deliver cash returns of $12,000 per year forever. If the appropriate discount rate is 15 percent, how much is the house worth?

• A)$80,000
• B)$100,000
• C)$150,000
• D)$180,000

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Definitions:

Kinesthetic

Relating to kinesthesia, the perception of body movements and position, often highlighted in learning styles involving physical activity.

Aural Learner

An individual who learns most effectively through listening and auditory methods rather than through visual or tactile means.

Aural Learner

An individual who prefers and learns most effectively through hearing and listening.

Read/Write

Basic literacy skills involving the ability to read text for understanding and to write comprehensibly.