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Riskiness of an Investment

When the riskiness of an investment into an apartment complex warrants a 12.5% annual rate of return and the complicated is expected to generate net cash flow (as after utilities, preservation and other costs) of $2 million per year, the apartment complex would have a market value of: (1) $10 million. (2) $12.5 million. (3) $15 million (4) $16 million. (5) $20 million

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