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An investment property generates a cash flow of $550,000 and has a ROI of 12%. What is the value of the property assuming the numbers above (to the nearest thousand)?
a) $4,583,000
b) $66,000
c) $6,111,000
d) $2,619,000

Respuesta :

Answer:

option A

Step-by-step explanation:

given,

Cash flow = $550,000

Return on investment = 12 %

value of the property = ?

we know,

[tex]ROI = \dfrac{Profit}{Investment}[/tex]

[tex]value = \dfrac{cash\ flow}{ROI}[/tex]

[tex]value = \dfrac{\$ 550,000}{0.12}[/tex]

 value =  $4,583,333.33

value is approximately equal to $4,583,000

Hence, the correct answer is option A

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