You are considering a real estate investment with the following parameters and a fiveyear holding period. Calculate the unlevered and levered NPV and IRR. Based solely on these calculations, would you proceed with the investment and why?

Purchase Price= 22,000,000

Anticipated NOI=

year 1 1,500,000

year 2 1,600,000

year 3 1,800,000

year 4 2,000,000

year 5 2,100,000

year 6 (stabalized) 2,150,000

LTV 70.0%

Payment frequency Monthly

Mortgage rate 3.5%

Mortgage rate per month 0.2896%

Term (years) 5

Amortization (years) 25

Anticipated cap rate on sale 9.0%

Required Equity Return 15.0%

Required WACC 10.0%