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Show excel Steps for the highlighted sections Excel steps Fill in the sheet titled NPV - IRR . Ann will buy the property in 2
Show excel Steps for the highlighted sections Excel steps
Fill in the sheet titled NPVIRR
Ann will buy the property in she will collect NOI for years and she will sell it in
Anns loan has a prepayment penalty structure, so if she prepays in the first year, she will pay
a penalty equal to of the balance, in the second year she will pay a penalty equal to of the
balance etc.
Ann forecasts NOI will grow at per year, compounded annually.
Ann forecasts she can sell the property in at a cap rate.
Recall: Sale price in NOICAP RATE
a How much will Ann sell the property for in
b How much of a capital gain will Ann earn? Hint: capital gain sale price purchase price
c What is Anns IRR for this investment?
d If Anns discount rate is what is her NPV Should she make this investment?
e Plot Anns NPV for discount rates Copy and paste the chart below.
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