An investor has projected three possible scenarios for a project as follows: Pessimistic-NOI will be $210,000 the first year, and then decrease 2 percent per year over a five-year holding period. The property will sell for $1.84 million after five years. Most likelyNOI will be level at $210,000 per year for the next five years (level NO) and the property will sell for $2.10 million. Optimistic-NOI will be $210,000 the first year and increase 3 percent per year over a five-year holding period. The property will then sell for $2.40 million. The asking price for the property is $2.10 million. The investor thinks there is about a 30 percent probability for the pessimistic scenario, a 40 percent probability for the most likely scenario, and a 30 percent probability for the optimistic scenario. Required: a. Compute the IRR for each scenario. b. Compute the expected IRR. c. Compute the variance and standard deviation of the IRRS. Complete this question by entering your answers in the tabs below. Required A Required B Required c Compute the IRR for each scenario. (Do not round intermediate calculations. Round your answers to 2 decimal places.) IRR % Optimistic Most likely Pessimistic % % An investor has projected three possible scenarios for a project as follows: PessimisticNO/ will be $210,000 the first year, and then decrease 2 percent per year over a five-year holding period. The property will sell for $1.84 million after five years. Most likelyNOI will be level at $210,000 per year for the next five years (level NO) and the property will sell for $2.10 million. Optimistic-NO/ will be $210,000 the first year and increase 3 percent per year over a five-year holding period. The property will then sell for $2.40 million. The asking price for the property is $2.10 million. The investor thinks there is about a 30 percent probability for the pessimistic scenario, a 40 percent probability for the most likely scenario, and a 30 percent probability for the optimistic scenario. Required: a. Compute the IRR for each scenario. b. Compute the expected IRR. c. Compute the variance and standard deviation of the IRRS. Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute the expected IRR. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Expected IRR % An investor has projected three possible scenarios for a project as follows: Pessimistic-NOI will be $210,000 the first year, and then decrease 2 percent per year over a five-year holding period. The property will sell for $1.84 million after five years. Most likelyNO/ will be level at $210,000 per year for the next five years (level NO) and the property will sell for $2.10 million. Optimistic-NO/ will be $210,000 the first year and increase 3 percent per year over a five-year holding period. The property will then sell for $2.40 million. The asking price for the property is $2.10 million. The investor thinks there is about a 30 percent probability for the pessimistic scenario, a 40 percent probability for the most likely scenario, and a 30 percent probability for the optimistic scenario. Required: a. Compute the IRR for each scenario. b. Compute the expected IRR. c. Compute the variance and standard deviation of the IRRS. Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute the variance and standard deviation of the IRRs. (Do not round intermediate calculations. Round "Variance" to 4 decimal places and "Standard deviation" to 2 decimal places.) Variance % Standard deviation %
