2007 exam Q1

In 07 exam Q1 to calculate the pre-tax return, does anybody know why the answer used expense of $200,500 as PMT, rather than $200,000 as PMT? Isn’t $200,000 the inflation adjusted real expense in today’s dollars?

200000, is what they immediately need, 1st disbursement. In one year time they will need 200,500 because of inflation.