Questions 31-40 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 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 companys weighted average cost of capital that they use as their discount rate for such calculations is 8%

1. In the Rubio 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.

2. What is the leveraged IRR of the project ?
   1. 32.15%
   2. 24.58%
   3. 21.48%
   4. 22.85%