Question
Given the following information regarding an income producing property, determine the internal rate of return (IRR) using unlevered cash flows. Expected Holding Period: 5 years;
Given the following information regarding an income producing property, determine the internal rate of return (IRR) using unlevered cash flows. Expected Holding Period: 5 years; 1st year Expected PGI: $91,200; 2nd year Expected PGI: $93,873; 3rd year Expected PGI: $96,626; 4th year Expected PGI: $99,462; 5th year Expected PGI: $102,383; Vacancy at 5% annually. Operating Expenses 40% of EGI annually. Debt Service in each of the next five years: $20,544; Current Market Value: $897,000; Required equity investment: $223,350; Gross Sales Price at end of year 5: $994,800 with Closing Expenses of $12,000 and Disposition Fee (Brokerage Commission) of 3% of Gross Sales Price.; Remaining Mortgage Balance at end of year 5: $431,126. Show your steps used in Excel.
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