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10pts Consider the purchase of a rental property for $400,000. You can borrow at 70% LTV and finance the property with a $280,000 mortgage at

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10pts Consider the purchase of a rental property for $400,000. You can borrow at 70% LTV and finance the property with a $280,000 mortgage at 6% (30-year amortization) with an annual debt service of $20,145. Expected NOI for the first 5 years is $36,000,$37,080,$38,192,$39,338, and $40,518 respectively. Assume that you can sell the property at the end of year 5 to net $417,339 with a remaining mortgage balance of $269,606. What is the leveraged IRR on this investment? 21.23% 18.37% 20.51% 17.99% 24.02%

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