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The use of financial leverage in purchasing an income producing property can affect the arnount of cashrequired at acquisition the nef cashiflows from rental operntions,

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The use of financial leverage in purchasing an income producing property can affect the arnount of cashrequired at acquisition the nef cashiflows from rental operntions, the net Cash flows from the eventual sale of the property, and the ultimate return on invested equity. Assuming the fRR is greater than the effective cost of borrowing (f ce), if an investor incrcases his leverage rate, say from 75% to 80% we would expect which of the following to oocii?? NPV increuses, while IRR decreases both NPV and IRR increase NpV decreases, while tRR increases bothNPV and IRRolecrease

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