3. Sofia bought a rental house for $650,000. She rented it for 5 years at...
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3. Sofia bought a rental house for $650,000. She rented it for 5 years at $3,100/month. At the end of the 5th year, she sold it for $750,000. What was her average annual rate of return on this investment? [Assume no other cash flow
4. Sephora is considering to buy a project that returns her $100,000/year for the first 4years, and $125,000/year for the next 4years. She invests only if she can earn at least a 12% annualized return on this 8year project. What is the maximum price she should pay to own this project?
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