Calculate the IRR of the investment, assuming a sales price of $ 1 , 1 0

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Question:

Calculate the IRR of the investment, assuming a sales price of $

1, 100, 000

Purchase Price: $

900, 000

Loan: $

750, 000, 5 %, 25

years

(

annual payments

)

Year

1

NOI: $

100, 000

Year

2

ATCF: $

33, 000

Year

3

ATCF: $

34, 000

Use an

85 / 15

ratio for depreciation.

39

vear, straight line.

35 %

tax rate on income,

15 %

on long term capital gains,

25 %

depreciation recapture. Annual loan payment:

53, 214.34

Annual depreciation expense:

19.615.38

After tax cash flow for year

1

31, 776

After tax cash flow from sale at the end of year

3

354, 827.93

Related Book For answer-question

Business Mathematics In Canada

ISBN: 978-0070009899

7th edition

Authors: Ernest Jerome

See More Books

Posted Date: May 11, 2024 05:14 AM

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Calculate the IRR of the investment, assuming a sales price of $ 1 , 1 0

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To calculate the Internal Rate of Return IRR of the investment we need to consider the cash flows as... View the full answer

Business Mathematics In Canada

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