Question: 1 . Consider a property with expected future net cash flows of $ 2 5 , 0 0 0 per year for the next 5

1. Consider a property with expected future net cash flows of $25,000 per year for the next 5 years. After that OCF should step up 20% for the following 5 years. If you expect to sell the property 10 years from now for a price 10x the net cash flow at that time, what is the value of the property if the required return is 12%?
2. Based on the previous question. Suppose the price is $260,000. Should we buy?
3. What is the IRR if we buy at $260,000?
4. What is the IRR if we convince them to sell at $248,075? NPV?

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