Question

Abby purchased a commercial property using all cash at a 11% capitalization rate. What is Abby's cash-on-cash return on the deal...?

Answer 1

11%

Step-by-step explanation:

A cash-on-cash return is a rate of return often used in real estate transactions that calculates the cash income earned on the cash invested in a property.

Cash on Cash Return= Annual Pre-Tax Cash Flow / Total Cash Invested

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