An individual is planning to pay $400,000 cash for a small motel (i.e., price inludes the land valued at $40,000). This porperty has the following expected gross pre-tax income over the next 6 years and then can be sold for $380,000 (land still valued at $40,000). 1 2 year Annual Income $ 3 34,000 4 24,500 5 36,000 6 26,500 32,500 23,800 What is the post-tax Internal Rate of Return (IRR) of this investment and does it make sense, if MARR is 10%? The individual's tax bracket is 22% and the capital gains rate is 25%. Assume that the purchase and sale take place January 1st of the year. NOTE: This is considered as a residentail property with a service life of 27.5 years