You are a real estate investor and you would like to use the IRR partitioning method to evaluate the riskiness of your investment (a) Here are you estimates for the proposed investment Required equity investment $800,000, Estimated after tax annual cash flows (ATCF) from rental income $55,000, The property would be sold in 15 years, Estimated after tax cash flow (ATCF) from sale $1,500,000 Based on this information, your estimated internal rate of return on this investment is Put the answer in percent, not in decimals, but without the sign Round to 2 decimal places For example, if you got 12 34 percent, type 12 34 (b) Let's continue calculating the IRR partitions , but start with slightly different numbers (By the way, I am doing this so that if you made a mistake in part (a), it doesn't affect your subsequent answers ) You are given the following intermediate results The annual ATCFs are still $55,000, The holding period is still 15 years, The ATCF from sale is still $1,500,000 You are also given the IRR on this investment equal to 9 If this is the case, the implied equity investment equals $, the Present Value of the annual ATCFs discounted at the IRR equals $, and the Present Value of the ATCF from sale discounted at the IRR equals $ Round all three answers to whole dollar and don't put the $ signs (c) Again, let's continue calculating the IRR partitions , but start with slightly different numbers You are given the following intermediate results The Present Value of the annual ATCFs discounted at the known IRR equals $400,000, The Present Value of the ATCF from sale discounted at the known IRR equals $360,000 In this case, the IRR partition based on the annual cash flows equals , and the IRR partition based on the cash flow from sale equals Put both answers in percent, not in decimals, but without the signs Round to 2 decimal places For example, if you got 12 34 percent, type 12 34 Based on the IRR partitions that you have just calculated in part (c), your annual return on the investment is primarily determined by the cash flow from sale This statement is Type true or false

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You are a real estate investor and you would like to use the IRR partitioning method to evaluate the riskiness of your investment. . (a)

You are a real estate investor and you would like to use the "IRR partitioning" method to evaluate the riskiness of your investment.

(a) Here are you estimates for the proposed investment:

Required equity investment: $800,000,
Estimated after-tax annual cash flows (ATCF) from rental income: $55,000,
The property would be sold in 15 years,
Estimated after-tax cash flow (ATCF) from sale: $1,500,000.

Based on this information, your estimated internal rate of return on this investment is %. Put the answer in percent, not in decimals, but without the "%" sign. Round to 2 decimal places. For example, if you got 12.34 percent, type 12.34.

(b) Let's continue calculating the "IRR partitions", but start with slightly different numbers. (By the way, I am doing this so that if you made a mistake in part (a), it doesn't affect your subsequent answers!) You are given the following intermediate results :

The annual ATCFs are still $55,000,
The holding period is still 15 years,
The ATCF from sale is still $1,500,000.
You are also given the IRR on this investment equal to 9%.

If this is the case, the implied equity investment equals $, the Present Value of the annual ATCFs discounted at the IRR equals $, and the Present Value of the ATCF from sale discounted at the IRR equals $. Round all three answers to whole dollar and don't put the $ signs.

(c) Again, let's continue calculating the "IRR partitions", but start with slightly different numbers. You are given the following intermediate results:

The Present Value of the annual ATCFs discounted at the known IRR equals $400,000,
The Present Value of the ATCF from sale discounted at the known IRR equals $360,000.

In this case, the "IRR partition" based on the annual cash flows equals %, and the "IRR partition" based on the cash flow from sale equals %. Put both answers in percent, not in decimals, but without the "%" signs. Round to 2 decimal places. For example, if you got 12.34 percent, type 12.34.

Based on the "IRR partitions" that you have just calculated in part (c), your annual return on the investment is primarily determined by the cash flow from sale. This statement is . Type "true" or "false".