A commercial warehouse produces an income of $ 2,200 per month. The maintenance contract costs $ 1,250 per quarter. The taxes are $ 1625 annually. If an investor wants a 15% rate of return, how much should he pay for the warehouse?

Respuesta :

Answer:

$131,833.33

Explanation:

Data provided in the question

Produced income = $2,200 per month

Cost of the maintenance contract = $1,250 per quarter

Taxes = $1,625 annually

Rate of return = 15%

By considering the above information, the amount of pay after considering the rate of return is

= (Produced income × total number of months in a year - cost of the maintenance contract × total number of quarters in a year - taxes paid annually) ÷ (Rate of return)

= ($2,200 × 12 months - $1,625 × 4 quarters - $1,625) ÷ (15%)

= ($26,400 - $5,000 - $1,625) ÷ (15%)

= $19,775 ÷ 15%

= $131,833.33