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please use excel functions A capital budget was built to determine the profitability of an apartment complex. The apartment contains 50 units and typically has
please use excel functions
A capital budget was built to determine the profitability of an apartment complex. The apartment contains 50 units and typically has a 10% vacancy rate. The price of the complex is $2 million and you believe that you can sell the property in 6 years for $2.2 million. Using the information to the left about annual rents, fixed costs, and variable expenses for each year, find the Net Present Value and Internal Rate of Return. 1) First calculate the expected annual revenue and costs for each year on rows 15 to 17. 2) Use the revenues and costss to calculate the total (net) cash flow on row 18. 3) When calculating the Net Present Value, use the Total Cash Flow and Cost of Capital Information. Hint: Your total cash flow in Year 0 is the initial investmeot and should be added to your NPV, not included in the NPV function. 4) When calculating the Internal Rate of Return, use the Total Cash Flow information. This will tell you what the expected annual return is on the investment. Hint: The initial investment should be included in the IRR function. Extra Note: If the NPV is positive and the IRR is greater than the Cost of Capital, the investment should be made. A capital budget was built to determine the profitability of an apartment complex. The apartment contains 50 units and typically has a 10% vacancy rate. The price of the complex is $2 million and you believe that you can sell the property in 6 years for $2.2 million. Using the information to the left about annual rents, fixed costs, and variable expenses for each year, find the Net Present Value and Internal Rate of Return. 1) First calculate the expected annual revenue and costs for each year on rows 15 to 17. 2) Use the revenues and costss to calculate the total (net) cash flow on row 18. 3) When calculating the Net Present Value, use the Total Cash Flow and Cost of Capital Information. Hint: Your total cash flow in Year 0 is the initial investmeot and should be added to your NPV, not included in the NPV function. 4) When calculating the Internal Rate of Return, use the Total Cash Flow information. This will tell you what the expected annual return is on the investment. Hint: The initial investment should be included in the IRR function. Extra Note: If the NPV is positive and the IRR is greater than the Cost of Capital, the investment should be made Step by Step Solution
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