Use excel only and show formulasan office building is, Ask an Expert

Finance

USE EXCEL ONLY AND SHOW FORMULAS

An office building is purchased with the following projected cash flows:

• NOI is expected to be $130,000 in year 1 with 5 percent annual increases.

• The purchase price of the property is $720,000.

• 100 percent equity financing is used to purchase the property.

• The property is sold at the end of year 4 for $860,000 with selling costs of 4 percent.

• The required unlevered rate of return is 14 percent.

a. Calculate the unlevered internal rate of return (IRR).

b. Calculate the unlevered net present value (NPV).

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M93060126

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