. Calculate the IRR and NPV for the following cash flows. Assume a 15% discount rate
Year |
Project 1 Cash flow |
Project 2 Cash flow |
0 |
-$20,000 |
-$20,000 |
1 |
1,000 |
12,000 |
2 |
3,000 |
15,000 |
3 |
4,000 |
3,000 |
4 |
12,000 |
4,000 |
5 |
15,000 |
1,000 |
9. If your tenant pays you rent of $24,000 a year for 10 years, what is the present value of the series of payments discounted at 10% annually?
10. You are going to invest $300,000 in a real estate investment project that generates the following cash flows.
Year |
1 |
2 |
3 |
4 |
5 |
Cash flow |
100,000 |
100,000 |
100,000 |
100,000 |
100,000 |
Assuming an 11% discount rate, what is the NPV of this project? What is the IRR?
1st question:
I have answered this question in Excel as follows:
Note:
9. Present Value of series of payments=24,000*PVAF(10%,10)
=24,000*6.1446
=$1,47,470.4
10. This question I have answered in Excel as follows:
Note:
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