An investor is considering purchasing a property (unleveraged) that is expected to have annual net operating income as follows: 

Year 1: 100,000; 

Year 2: 105,000; 

Year 3: 110,000; 

Year 4: 115,000; and Year 5: 120,000, and you expect to be able to sell the property for $1.4 million at the end of Year 5. 

All cash flows are assumed to occur at the end of each year. If the investor requires an annual return of 12%, what is the project’s NPV if purchased for $1.0 million and does this meet her return criterion? 

Group of answer choices 

+ 30,139; 

no + 186,860; 

yes - 113,780; 

no - 166,667; no

Answer rating: 100% (QA)

Present value of inflowscash inflowPresent value of discounting f... View the full answer