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please help!!! these Qs are all connected Questions 3140 are four (4) points each. Your employer, Kent, LLC, is considering an investment in an office
please help!!! these Qs are all connected
Questions 3140 are four (4) points each. 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 2276,000 Year 4,239,000 Year 5.....250,000, and a sale @ $3,190,000 takes place EOY 5 Thecompanysweightedaveragecostofcapitalthattheyuseastheirdisc for such calculations is 7% 31. What is the project's IRR? a. 15.11% b. 10.96% c. 10.38% d. 16.12% 32. For Kent, LLC what is the NPV? a. $344,814 b. $168,158 c. $473,883 d. $490,401 33. In the above problem, you might expect a. The Yield to be higher than the discount rate because you sold the property at a profit. b. The NPV to be positive because the IRR is higher than the discount rate c. The NPV to be negative because the IRR is lower than the discount rate d. All.of the above 34. The Dow Jones Industrial Average is made up of a. 10 companies b. The largest 1,000 companies in the world c. 30 blue chip companies, not all of which are heavy industrial companies d. 100 companies with large cap market value In the Kent, LLC example above, assume that the company bought the office building using 70% mortgage debt at an interest rate of 4.00% over 240 months. 35. What would be the monthly debt service on the office building? a. $11,665 b. $9,544 c. $6,890 d. $1.877 36. What would be the net cash flows after debt service in yelar 3? a. $105,470 b. $80,019 c. $100,018 d. $2,980,000 37. What would be the balance of the loan at the end of Year 5 ? a. $1,240,000 b. $1,376,320 c. $1,290,300 d. $1,577,033 38. What would be the total cash flows in Year 5 , taking into consideration the cash flows, annual debt service, sale price and the balance on the loan at the EOY 5 ? a. $1,662,985 b. $1,937,607 c. $1,722,986 d. $1,915,172 39. What is the leveraged IRR of the project ? a. 32.15% b. 24.58% c. 21.48% d. 22.85% 40. Using the company's hurdle rate (discount rate) for leveraged projects of 11.00%, what is the leveraged NPV of the project? $467,694$893,210$591,450$953,378 Step by Step Solution
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