If we require an 8 roa what is the most we should pay now


A small office building produces NOI of $9,960 per year. We intend to buy the property, if the price is right, and hold it for four years. At that time (EOY 4) we believe we can sell the property for $264,000. If we require an 8% ROA, what is the most we should pay now for this investment? PVIFA 8%, 4 yrs = 3.312; PVIF 8%, 4 yrs = 0.735.

A. $227,028

B. $194,040

C. $169,160

D. $124,500

E. $ 7,800

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