An investor owns an empty block of land that was bought for $3 million a few years ago, but could be sold at auction for $2 million now. The land has local government approval to be developed into either:Low-rise townhouses costing $11 million now (t=0) that can be rented for $2 million in the first year, paid at the end of that year (t=1), and then rent is expected to grow by 3% pa every year forever; orHigh rise apartments costing $180 million now (t=0) that can be rented for $25 million in the first year, paid at the end of that year (t=1), and then rent is expected to grow by 1% pa every year forever.The government will only allow a single development so the projects are mutually exclusive.These projects have the same risk and 12% pa required return. Both will be fully constructed in one year, at which point tenants will move in and pay rent annually in advance, with the growth rates given. Ignore all maintenance costs, tenant vacancies, taxes and so on. All answer options are rounded to 6 decimal places. Compare the two projects against selling the land. Which of the following statements is NOT correct?Question 6Select one:a.$9.222222 million is the NPV of the low-rise townhouses.b.18.384615% pa is the IRR of the low-rise townhouses.c.$45.272727 million is the NPV of the high-rise apartments.d.1% pa is the IRR of the high-rise apartments.e.The high-rise apartment project should be accepted.

Assuming the rent will grow at 5% p.a what is the value the property?

1. You have received instructions from the proprietor of a school to provide an estimate of the market value of a four-storey school complex. The building, which is situated on a 3-acre parcel of land, has a total gross building area of 2,400m2. You have determined that the building, which was constructed 10 years ago, has an effective age of 8 years. Evidence gathered from the market indicates that a similar property with a gross building area of 2,000m2 was recently constructed at a cost of GH¢6,000,000. Land values within the neighbourhood of the school are currently estimated at GH¢350,000 per acre. A similar building with a replacement cost (as new) of GH¢5,500,000 was recently sold for GH¢5,200,000. At the time of sale, the building had an effective age of 12 years while the 2.5-acre land on which the building is situated was estimated at GH¢800,000.

A town plans to attract new citizens with new housing and new facilities such as parks, recreation centres and libraries. One component of the town’s plans is to require that development seeking permission is to build this new housing to provide these additional facilities at no cost to the town.Which of the following, if true, would point to a possible flaw in the town’s plan?Choices:- Developers would pass along their costs to the buyer; thereby raising the cost of housing units beyond the ability of likely purchasers to afford them. Light, non-polluting industries have located in the area, offering more jobs and better paying jobs than do the more established industries in the area. Other towns and cities nearby have yet to embark on comparable plans to attract new citizens Most developers see the extra expense of providing municipal facilities as simply one of the many costs of doing business.

How much would Susan be willing to pay for an investment property today if she believes it will generate $30,000 per year in rent indefinitely (after deducting agent fees and other costs), growing at 1% above inflation if he can achieve a real rate of return on similar investments of 6% per annum using the ‘Present value of future rent’ valuation approach (to the nearest dollar)?Please do not include dollar signs or commas in your answer.

If a city government enacts a maximum price on rent