Question
A client has requested advice on a potential investment opportunity involving an income producing property. She would like you to determine the internal rate of
A client has requested advice on a potential investment opportunity involving an income producing property. She would like you to determine the internal rate of return of the investment opportunity based on the following information:
Expected Holding Period:5 years
End of first year NOI estimate: $113,900
NOI estimates in subsequent years will grow by 5% per year
Price at which the property is expected to be sold at the end of year 5: $1,615,205.22
Current market price of the property: $1,475,667.71
Use the Trial and Error method with discount rate of 9% and 11% for NPV calculation them determine the IRR between it.
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