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You analyzed a possible 4 year investment for your firm, and calculated an IRR of 17.8% for the investment and the corresponding cash flows over
You analyzed a possible 4 year investment for your firm, and calculated an IRR of 17.8% for the investment and the corresponding cash flows over the life of the investment. You were instructed to then partition the IRR to determine what portion of the return comes from the property cash flow vs the property sale in year 4. The PRESENT VALUES you calculated for years 1- 4 were $8,487, $10,804, $12,226 and $11,414, respectively, for the property flows. Terminal value in year 4 was $57,069 also in present value terms. What portion of your total return comes from property flows, and what was the amount of the original investment (Year 0 outlfow), respectively? a. 42.9%, $100,000 b. 57.1%, $75,000 c. 63.2%, $100,000 d. 42.9%, $42,931
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