I need study help with all of the real estate finance questions below, thank you in advance!
Typing your answers T Lacei. 1. How much would you pay for the right to receive $15,000 at the end of 20 years if you can earn a 6% return on a real estate investment with similar risk? 2. What constant amount invested at the end of each year at a 12% annual interest rate will be worth $30,000 at the end of five years? 3. Your father will convey a property to you in 15 years. If the property is expected to be worth $600,000 when you receive it, what is the present value of the property? Your discount rate is 8%. 4. What is the NPV of $500 received for the next four years and $2,000 received at the end of the fifth year if your required return is 5.5%? 5. Assuming no income or holding costs during the period, if you purchased a vacant parcel of land five years ago for $1,500,000, how much would you have to sell it for to yield a 12% annual return on your investment? 6. You own a building that a local business wants to rent for the next 10 years. The business owner has offered to pay $50,000 today or pay $8,700 at the end of each of next 10 years. If your required rate of return is 10%, which payment schedule should you accept? 7. How much would you pay to participate in a real estate project that pays nothing for the first 10 years and $3,000 for the following 10 years if you can earn 15% return on other investments of similar risk? 8. Calculate the IRR and NPV for the following cash flows. Assume a 10% discount rate Year 0 Project 1 Cash flow -$30,000 2,000 4,000 5,000 15,000 20,000 Project 2 Cash flow -$30,000 20,000 15,000 5,000 4,000 2,000 2 3 4 5 9. If your tenant pays you rent of $30,000 a year for 10 years, what is the present value of the series of paym nts discounted at 7.5% annually? 10. You are going to invest $400,000 in a real estate investment project that generates the following cash flows. Year Cash flow 2 120,000 120, 120,000 5 120,000 120,000 Assuming a 10% discount rate, what is the NPV of this project? What is the IRR