Assume that a property can be purchased for $100,000 that has an initial of $9,000. It will be sold after five years at a 10 percent terminal cap rate applied to year 6 The growth rate is 1 percent; the most likely growth rate is 3 percent, and the optimistic growth rate is 4 percent per year. Using a triangular distribution for the growth rate, we can apply Monte Carlo simulation to get 1,000 growth rates and 1,000IRRs This was done in the Excel spreadsheet that accompanies this book. 

What calculations and formulas were used to find the solutions to this problem? How do I graph the given solutions?

Answer rating: 100% (QA)

Here are the key calculations and formulas used to solve this Monte Carlo simulation problem Growth ... View the full answer