Question
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
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.
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Corporate Finance Core Principles and Applications
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford
3rd edition
978-0077971304, 77971302, 978-0073530680, 73530689, 978-0071221160, 71221166, 978-0077905200
