Charter Properties, LLC has investment properties which they purchased for $8,535,000. They receive $300,000 per year in net operating income (NOI). They plan to hold these properties for 10 years and then divest.

In the 10th year, Charter believes that the Terminal Value will be based on the 11th year NOI with an assumed growth rate of 4%.

Assume a discount rate of 6%:

1) Calculate the DCF value of the portfolio of properties based on the assumptions given.

2) Calculate the NPV

3) Calculate the IRR

Answer rating: 100% (QA)

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