PART 1-10 PLEASE ALL THE SAME PROBLEM JUST MULTIPLE STEPS

32. Questions 31-40 are four (4) points each. Your employer, Kent, LLC, is considering an investment in an office building that has the following cash flows: a. Purchase in Year 0 $2,750,000 b. Year 1 180,000 c. Year 2 . 276,000 d. Year 3 220,000 e. Year 4 239,000 f. Year 5 250,000 , and a sale @ $3,190,000 takes place EOY 5 g. The company's weighted average cost of capital that they use as their discount rate for such calculations is 7% 33. 31. What is the project's IRR? a. a. 15.11% b. b. 10.96% c. c. 10.38% d. d. 16.12% 34. 32. For Kent, LLC what is the NPV? a. a. $344,814 b. b. $168,158 c. c. $473,883 d. d. $490,401 37. 34. The Dow Jones Industrial Average is made up of a. a. 10 companies b. b. The largest 1,000 companies in the world c. c. 30 blue chip companies, not all of which are heavy industrial companies d. d. 100 companies with large cap market value 38. 39. In the Kent, LLC example above, assume that the company bought the office building using 70% mortgage debt at an interest rate of 4.00% over 240 months. 40. 35. What would be the monthly debt service on the office building? a. a. $11,665 b. b. $9,544 c. c. $6,890 d. d. $1,877 41. 36. What would be the net cash flows after debt service in year 3 ? a. a. $105,470 b. b. $80,019 c. c. $100,018 d. d. $2,980,000 42. 37. What would be the balance of the loan at the end of Year 5 ? a. a. $1,240,000 b. b. $1,376,320 43. 38. What would be the total cash flows in Year 5, taking into consideration the cash flows, annual debt service, sale price and the balance on the loan at the EOY 5 ? a. a. $1,662,985 b. b. $1,937,607 c. c. $1,722,986 d. d. $1,915,172 44. 39. What is the leveraged IRR of the project? a. a. 32.15% b. b. 24.58% c. c. 21.48% d. d. 22.85% 45. 40. Using the company's hurdle rate (discount rate) for leveraged projects of 11.00%, what is the leveraged NPV of the project? a. $467,694 b. $893,210 c. $591,450 d. $953,378