Problem: "I bought a one unit apartment (2 bedrooms, 2 baths, kitchen and living room) of the Executive Center for $300,000 with a loan from BOH for 6% per year, payable in equal monthly installments over a 20 year period. I hired also the Best Western Company to manage the unit for a fee of $500 a month. Before I rented the apartment to 4 students at $500 a month each, I spent $100,000 of my own money to renovate, replace the furniture, install wireless connections and new television. "I need your advice whether this is a financially viable investment. Support your recommendation with three financial indicators,
(a) net present value of total cost, total revenue and cash flow,
(b) the benefit cost ratio and
(c) internal rate of return of the proposed investment.
(d) your conclusion about the profitability of this investment.