M. Sam Gof desires to invest a portion of his assets in rental property He has n

Question

M. Sam Gof desires to invest a portion of his assets in rental property He has narrowed his choices down to two apartment complexes, Palmer Heights and Crenshaw Village After conferring with the presen owners, Mr. Oalt has developed the following estimates of the cash fow for these propertes Cash Ito 150 156 2 185 190 Aherax 160 170 180 a. Find the expected Cash fow froh oach apartment complux. Einter your answers in thousands (o-g.$10,000 should be enter as -10) b. What is the coeficient of varlation for each apartmient oomplex? (Do not round intermediate calculations Round your answers to 3 decimal places Palmer Heights

Explanation / Answer

EXPECTED CASH FLOW OF PALMER HEIGHTS

EXPECTED CASH FLOW OF Crenshaw Village

  

EXPECTED CASH FLOW FROM EACH APPARTMENT:

S.D OF PALMER HEIGHT :

MEAN = 170

S.D = ?250 = 15.81

S.D OF Crenshaw Village

PROBABILITY

(A)

(AMOUNT- MEAN)^2

(B)

MEAN = 165

S.D =  ?60= 7.74

COFFICIENT OF VARIATIONS

YEARLY AFTER TAX CASH INFLOWS( IN THOUSANDS) PROBABILITY AMOUNT 150 .2 30 155 .2 31 170 .2 34 185 .2 37 190 .2 38 TOTAL   170

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