Answer:
market net operating profit per square foot = $8.80
Explanation:
total investment = $145 per square foot
the investor requires a 6% rate of return = $145 x 6% = $8.70 per square foot
total revenue per square foot = $11
proportional market vacancy and credit loss = $11 x 5% = ($0.55)
other expenses = $11 x 15% = ($1.65)
market net operating profit per square foot = $8.80
The project should be carried out since the net operating profit is larger than the investor's required rate of return.
