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7.) How much would you pay to participate in a real estate project that pays $0 for the first two years and $1,100,000 for the
7.) How much would you pay to participate in a real estate project that pays $0 for the first two years and $1,100,000 for the following three years if you can earn a 11.00% return on other investments of similar risk? Discount rate 0.11 Year 1,100,000 1,10 $804,310.50 724,604.07 652,796.46 0,000 1,100,000 PV NPV 2,181,711 You are evaluating an investment that will provide the cash flows listed below at the end of each year. You believe that you should earn 11.00% percent compounded annually on this investment. How much would you be willing to pay for this investment? Discount rate 0.11 Year 150,000 200,000 275,000 350,000 3,750,000 PV NPV 9.) An investment is expected to produce the following annual year-end cash flows: Year 1, $32,500; Year 2, $35,000; Year 3, $37,500; Year 4, $40,000; and Year 5, $45,000. If the i t costs you $155,000 today what is its expected annual internal rate of return, compounded annually? Year 32,500 35,000 37,500 40,000 45,000
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