Equity capital contribution


Question: Bob has USD 1,000,000 of his own equity capital available to make a real estate investment. He finds a bargain, a property with a market value of USD 1,100,000 that he can buy for USD 1,000,000. By how much can he enhance the market value of his net gain by leveraging his buy of this bargain property using borrowed money from a hank to finance fifty percent of his investment? Explain your answer.

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Finance Basics: Equity capital contribution
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