A, B, and C each have $100,000 to spend on a rental house

Economics Nov 04, 2020

A, B, and C each have $100,000 to spend on a rental house. By the end of year 1, whoever buys the house will have earned $9,000 in rent after paying all expenses, and the owner will then sell the house and earn $103,000 after paying all closing expenses. Each of them has different requirements for their investments. "A" would like to earn a 4.5% return, "B" would like to earn 12%, and "C" would like to earn 13%. Whose investment needs will be met by buying the rental house?

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