1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
natta225 [31]
3 years ago
6

A client has requested advice on a potential investment opportunity involving an income-producing property. She would like you t

o determine the internal rate of return of the investment opportunity based on the following information: expected holding period: years; end of first year NOI estimate: $113,900; NOI estimates in subsequent years will grow by 5% per year; price at which the property is expected to be sold at the end of year 5: $1,615,205.22; current market price of the property: $1,475,667.71.
A. -15.30%
B. 8.60%
C. 9.86%
D. 10.00%
Business
1 answer:
s2008m [1.1K]3 years ago
5 0

Answer:

The correct answer is D. 10.00%

Explanation:

To get internal rate of return we use excel or a spreadsheet.  See document attached.

Make the cash flow to solve this problem.  At moment 0 we have the investment cost , in this case $1.475.668 (negative) From period 1 to period 5, we have different incomes o benefits.  Salvage value is 1.615.205, we are going to get it at moment 5 (positive).

Then, we calculate the Net cash flow that is the difference between benefits and cost.

We use all the result (positive and negative) in Net cash flow to get the IRR.

Net Present Value (NPV) 768907

Internal Rate of Return (IRR) 10,00%

Download xlsx
You might be interested in
Which of the following factor is a cause for team failure?
Anastaziya [24]

Answer:

Conflicting personalities

6 0
3 years ago
Read 2 more answers
6.You now have the agreement with the company and will sign the contract as you and the company are satisfied with the contract
Alex_Xolod [135]

A- Gather information

B- Manage concessions

C- Manage time

D- Build the relationship

7.You and the other party have either come to an agreement on the terms, or one party has decided that the final offer is unacceptable and therefore must be walked away from. Most negotiators assume that if their best offer has been rejected, there’s nothing left to do. You made your best offer and that’s the best you can do. This represent which of the negotiation process element?

A- Gather information

B- Manage concessions

C- Manage time

D- Build the relationship

8.Assemble the information you’ve gathered in a way that supports your position. You can present facts that show what you will contribute to the organization in the future, which in turn demonstrates your value. This represent which of the negotiation process element?

A- Gather information

B- Manage concessions

C- Manage time

D- Build the relationship

5 0
3 years ago
You are planning to make monthly deposits of $70 into a retirement account that pays 12 percent interest compounded monthly. If
Brums [2.3K]

Answer:

FV= $115,928.81

Explanation:

Giving the following information:

Monthly deposit= $70

Interest rate= 0.12/12= 0.01

n= 24*12= 288

<u>To calculate the future value, we need to use the following formula:</u>

FV= {A*[(1+i)^n-1]}/i

A= monthly deposit

FV= {70*[(1.01^288) - 1]} / 0.01

FV= $115,928.81

6 0
3 years ago
Oriole Company issues $200,000, 20-year, 9% bonds at 104. Prepare the journal entry to record the sale of these bonds on June 1,
user100 [1]

Answer:

Dr Cash $208,000

Cr Bonds payable $200,000

Cr Premium on bonds payable $8,000

Explanation:

Preparation of the journal entry to record the sale of these bonds on June 1,

Based on the information given we were told that the company issues the amount of $200,000 at 104 which means the that the journal entry to record the sale of these bonds on June 1 will be:

Dr Cash $208,000

(2,000 × $104)

Cr Bonds payable $200,000

(2,000 × $100)

Cr Premium on bonds payable $8,000

(2,000 ×$4)

Note:-

$200,000/100 =$2,000

3 0
3 years ago
Farad, Inc., specializes in selling used trucks. During the month, Farad sold 50 trucks at an average price of $9,000 each. The
beks73 [17]
$788 to me and my brother in law I come see him
4 0
3 years ago
Other questions:
  • g Select one: a. Capital budgeting analysis for expansion and replacement projects is essentially the same because the types of
    10·1 answer
  • If the objective of your life insurance program is to get the greatest death protection now for your insurance dollars, you shou
    8·1 answer
  • Which of these phrases is call to action
    11·1 answer
  • Which of the following contracts would not be governed by the UCC? a. a contract for dentures b. a contract for the purchase of
    13·1 answer
  • You are torn between two saving accounts where to put your $1,500 in scholarship money for a year until you need it for next yea
    5·1 answer
  • Lisa Frees and Amelia Ellinger have been operating a catering business for several years. In March, the partners plan to expand
    9·1 answer
  • Gonzalez Company has been in business for several years. At the end of the current year, the ledger shows:
    15·1 answer
  • You are considering an investment in Crew Cut, Inc. and want to evaluate the firm's free cash flow. From the income statement, y
    8·1 answer
  • Which stage of the money laundering process occurs when funds gained from criminal activity enter the financial institution?.
    13·1 answer
  • For managers, in any organization, threats include product or service niches that are underserved, out-of-cycle hiring possibili
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!