R has recently witnessed his friend Beths success with her real estate investments, and he would like to pursue an investment of his own. JR has discovered an investment property that will provide him with a series of year-end annual cash flows based on a specific investment today.

	Year	After-Tax Cash Flow		Investor's yield: j1	8%
Cost	0	-$450,000		Reinvestment rate: j1	5%
	1	$30,000
	2	$35,250
	3	$38,000
	4	$38,000
	5	$40,000
	6	$42,000
	7	$45,000
	8	$45,000
	9	$48,000
	10	$600,000		includes disposition value

(a) Calculate the net present value of this investment.

(b) Calculate the internal rate of return (IRR) with no explicit reinvestment considered.

(c) Calculate the IRR and NPV assuming the stated reinvestment rate. Explain why the result is different than part (b).

(d) If the reinvestment rate is higher than the IRR with no explicit reinvestment, what would happen to the IRR and NPV? Explain and support with numerical examples.

(e) Based on all the investment measures calculated, should the investor proceed? Explain with reference to each of the measures calculated.

PLEASE SHOW USING HB10B2 CALCULATOR. Thanks.