Questions 31-40 are four (4) points each. Your employer, Rubio LLC, is considering an investment in an office building that has the following cash flows: Purchase in Year 0 $ -2,250,000 Year 1. 180,000 Year 2.. 226,000 Year 3.. 220,000 Year 4 239,000 Year 5 230,000, and a sale @ $3,090,000 takes place EOY 5 The companys weighted average cost of capital that they use as their discount rate for such calculations is 10%

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.

1. What is the leveraged IRR of the project ?
   1. 32.15%
   2. 24.58%
   3. 21.48%
   4. 15.55%
2. Using the companys hurdle rate (discount rate) for leveraged projects of 9.00%, what is the leveraged NPV of the project?
   1. $ 659,067
   2. $ 893,210
   3. $ 591,450
   4. $ 953,378