-Consider the Information in the Table Above

question 27

Multiple Choice

$$\begin{array} { l r r } & \text { If sold taday } & \text { If sold next year } \\\\\text { Sale price } & \$ 2,500,000 & \$ 2,650,000 \\\text { Martgage balance } & 1,000,000 & \mathbf { 9 0 0 , 0 0 0 } \\\text { Capital gain tax } & \underline{112,500} & \underline{135,000} \\\text { Cash flow } & \$ 1,387,500 & \$ 1,615,000 \\\text { NOl over next year } & & \$ 50,000\end{array}$$
-Consider the information in the table above. What is the marginal rate of return for keeping the property one additional year?

• A) 16.4%
• B) 20.0%
• C) $50,000
• D) $277,500