An investor calculates an incremental return of renovating a building of 14%.Other properties provide a 12.5% overall rate of return to equity investors.Therefore,the property is a good investment.

Question

Quizplus · Accepted Answer

The incremental return of renovating a building being higher than the overall rate of return of other properties does not automatically make it a good investment. Other factors such as risk, market conditions, and investment horizon must also be considered.

An Investor Calculates an Incremental Return of Renovating a Building