You are an investment manager with a large fund. The Fund requires that all investment models be on a 5-year basis. Make your recommendation based upon the following information:

Net Cash Flow: $104,000

Growth Rate: 4.2%

Cap Rate: 6.75%

WACC: 7.0%

What is the IRR of the acquisition?

What is the NPV of the acquisition?

Is there a profit on the sale at the end of year 4?

If so, what is the profit?

What is the Capital Gains tax on Sale?

Do you recommend this acquisition? Explain.