Question: Can you help me with question d-g? I keep getting weird answers... 1. Excel Problem: ve the opportunity to invest in Gopher Gardens, a residential

Can you help me with question d-g? I keep getting weird answers...

Can you help me with question d-g? I keep getting weird answers...1. Excel Problem: ve the opportunity to invest in Gopher Gardens, a

1. Excel Problem: ve the opportunity to invest in Gopher Gardens, a residential high-rise real estate property in You ha downtown Minneapolis. You expect Gopher Gardens to generate $4.5M in rent one year from now and for rent to increase at 8% per year for the following four years. Five years from now, you believe you will be able to sell the property for $30 million. Assume the interest rate is 6% per year. a. How much should you be willing to pay today for Gopher Gardens? b. If you can buy the property for $43 million, what is the NPV of this opportunity? c. Acknowledging that the dollar values above are in the future (and therefore are necessarily qi estimates) explore what the-NPV would be if your assumptions about growth are wrong. Specifically calculate the NPV for values of g between 0% and 10% (NPV @ g-O%, NPV @ g 1% etc.) You should use the Data Table utility, found in Data tab>What-if analysis>Data Table to do this. Plot your results in a connected (the dots are connected) scatter plot

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!