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:

Scientific Revolution

A period of significant developments in science during the 16th and 17th centuries, transforming views on nature and knowledge.

Pope Urban VIII

Pope from 1623 to 1644, known for his patronage of the arts and involvement in the Galileo affair, asserting the conflict between heliocentrism and Church teachings.

Heresy

Beliefs or opinions that deviate from established religious teachings, especially those considered orthodoxy in Christian churches, which can lead to condemnation or excommunication.

Galileo Galilei

An Italian astronomer, physicist, and engineer from the Renaissance Era, renowned for his contributions to the scientific method and significant astronomical discoveries with the telescope.