Question
8.53 a & b Suppose a certain property is expected to produce net operating cash flows annually as follows, at the end of each of
8.53 a & b Suppose a certain property is expected to produce net operating cash flows annually as follows, at the end of each of the next five years: $15,000, $16,000, $20,000, $22,000 and $17,000. In addition, at the end of the fifth year we will assume the property will be (of could be) sold for $200,000.
a. what is the NPV of a deal in which you would pay $180,000 for the property today assuming the required expected return or discount rate is 11% per year?
b. if you could get the property for only $170,000, what would be the expected IRR of your investment?
how do I do this all in excel?
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