Question

An office building has 66000 of net income and sold for 550000. What is the rate of return

Answer 1

The rate of return will be: 12%

Explanation:

Given

• Net income = 66000

As the building was sold for 550000

• Market value = 550,000

Return can be calculated by dividing the market value by the net income using the formula

Return = Net income / Market value

= 66000 / 550,000

= 0.12 which is 12%

Therefore, the rate of return will be: 12%