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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International Financial Management
Authors: Cheol Eun
9th Edition
1260788865, 9781260788860
