If a Property Will Produce Net Cash Flow That Grows

question 24

Multiple Choice

If a property will produce net cash flow that grows at a rate of 1.5% per year in perpetuity, and the opportunity cost of capital is 12%, then what is the "cap rate" net cash flow / property value) for the property?

• A) 8%.
• B) 10%.
• C) 10.5%.
• D) 12%.

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Definitions:

Structures

The arrangement or organization of interrelated elements in a material object or system, also applicable to abstract entities like societies.

Society

A group of individuals involved in persistent social interaction, or a large social group sharing the same geographical or social territory, typically subject to the same political authority and dominant cultural expectations.

Disenfranchise

The revocation of the right to vote or other rights of citizenship, often affecting specific populations or groups.

Convicted of Felonies

Refers to individuals who have been found guilty by a court of law for committing crimes considered severe.