/biz/ - Business & Finance

Got a question for you guys. Asset pricing [not school related, btw]

The asset is an apartment building that makes 5 million per year, houses 200 people, and has 90% vacancy. Operating costs are 500k per year including maintenance.

Then i'm asked how much should someone feel comfortable buying that apartment building.

I have all the maths background to do this stuff- just never did finance courses- some terms being thrown around that i'm not sure of.

Is this supposed to be a CAPM problem? Does the vacancy rate affect the risk? Any assumptions I can make to give a more through solution to the problem?

[seems like you would just pay revenue - operating cost but... that is too simple... must be a trick]

pic quazi-related, thanks

>>1645103
>quoting Marilyn Manson
lol