Assignment task: Find the expected return for investing in buildings in a metro area where the following three buildings are for sale:
1. The cost of the building is $2 million, the total rents are $700,000 and the total expenses are $500,000.
2. The cost of the building is $100 million, the total rents are $39 million and the total expenses are $32 million.
3. The cost of the building is $19 million, the total rents are $9 million and the total expenses are $7 million.
What would you expect is the cost of a building in that metro area if its rents are $5 million and the total expense is $5 million.
What would you expect is the net profit per year would be if a building in that metro area cost $50 million.