PER CHEGGS POLICY YOU ARE ALLOWED TO ASK ONE QUESTION WITH FOUR SUBPARTS. PLEASE ANSWER ALL

Your employer, Kent, LLC, is considering an investment in an office building that has the following cash flows: Purchase in Year 0: $-2,750,000 Year 1: 180,000 Year 2: 276,000 Year 3: 220,000 Year 4: 239,000 Year 5: 250,000 and a sale @ $3,190,000 takes place EOY 5 The company's weighted average cost of capital that they use as their discount rate for such calculations is 7%

1a. What is the project's IRR? 15.11% 10.96% 10.38% 16.12%

1b. For Kent, LLC, what is the NPV? $344,814 $-168,158 $473,883 $490,401

1c. In the above problem, you might expect the yield to be higher than the discount rate because you sold the property at a profit The NPV to be positive because the IRR is higher than the discount rate the NPV to be negative because the IRR is lower than the discount All of the above

1d. assume that the company bought the office building using 70% mortgage debt at an interest rate of 4% over 240 months what would be the monthly debt service on the office building? $11,665 $9,544 $6,890 $1,877