The net discounted return expected from an investment in the rental homes tract-after deducting the cost of the investment-is
Based on the results of your analysis, which of the following statements best reflects your decision regarding the commercial or residential lease
opportunities?
As the rental homes tract has a NPV that is greater than that expected from the office building, it is more financially sound to invest in
the residential lease property. Because the office building is expected to generate a negative NPV, you should not consider making this
investment.
Based on the numbers alone, you should prefer an investment in the office building since it has a net present value that is greater than
that expected from the residential lease property (rental homes tract).
Given that the rental homes tract has a NPV that is greater than that expected to be generated by the office building, you should prefer
to invest in the residential lease property.
As the office building has a NPV that is greater than that expected from the rental homes tract, it is more financially sound to invest in
the commercial lease property. Because the rental homes tract is expected to generate a negative NPV, you should not consider making
this investment.