A Real Estate Investment Company (REIC) has a weighted average cost of capital at 9% and $1.6 million of total capital to invest. The REIC aims to earn rental income from the investment and does not intend to sell the property in the short term. Which of the following properties is the most appropriate one to invest in?

Question

Answer

Property with 8% Cap Rate, NOI $400,000

Answer

Property with 11% Cap Rate, NOI $180,000

Answer

None of the other choices is appropriate

Answer

Property with 12% Cap Rate, NOI $300,000

Answer

Property with 10% Cap Rate, NOI $100,000

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A Real Estate Investment Company (REIC) has a weighted average cost of capital a...

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