. You are considering the acquisition of a small office building. The purchase price is $775,000. Seventy-five percent of the purchase price can be borrowed with a 30-year, 7.50% mortgage. Up-front financing costs will total 3.00% of the loan amount. The expected cash flows assuming a 5-year holding period are as follows:

Year NOI

1 $48,492

2 $53,768

3 $59,282

4 $65,043

5 $71,058 T

he cash flow from the sale of the property is expected to be $1,000,000.

a. What is the net present value of this investment, assuming a 12.00% required rate of return on levered cash flows?

b. What is the levered internal rate of return?

c. What would you need to consider if the numbers in the