(a) Did he recover his investment and a 12% per year return?
(b) If the annual M&O cost was $10,000 the first year and increased by a constant $1000 per year, was the AW positive or negative at 12% per year? Assume the $50,000 salvage was realized.
(a) What is the capital recovery amount?
(b) If there is a real boom in rental real estate 10 years in the future, what sales price (as a percentage of original purchase price) is necessary at that time (year 10) to realize the same amount as the 8% return expected over the 20-year ownership period?