You are considering purchasing a small condo in Flagstaff to use as a summer vacation and winter ski rental. The property would require an initial investment of $155,000 and would provide cash flows of 20,000 per year for the first 5 years. You would then sell the property at the end of year 5 and you estimate you would receive $175,000. b. If you financed the property with 80% equity at a 7.0% effective cost, what is you before-tax IRR on the equity invested ?

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