13.	An investor is considering renovating a building.  The total cost of renovation is expected to

13. An investor is considering renovating a building. The total cost of renovation is expected to

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 1.      An investor is considering renovating a building.  The total cost of renovation is expected to be $100,000, of which 75% can be borrowed.  Given the after-tax cash flows to the equity investor as showed below, what is the incremental return from renovating?

 

 
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ATCF after renovation
    9,200
  10,000
   12,000
  14,000
316,000
ATCF-no renovation
  10,000
  10,200
   10,440
  10,680
160,900
 

(A)   9.75%

(B)   10.14%

(C)   15.32%

(D)   12.67%
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