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A client of Mr. Richards wants to purchase a large commercial building. The building cost $20 million and he will make a down payment of 15% and finance the rest with a local bank.? The bank terms are 10 years bullet loan with 30 year amortization at 4.5% interest. The building earns annual rent of $2,500,000. and it pays annual taxes of $1,000,000. per year. What will be the annual cash flow from the building? What willbe the ROI on the investment?

Financial Management, Finance

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