Question 1

In performing a sensitivity analysis how would the NPV and IRR change if vacancy rates were 35% instead of 25%? Assume no other changes from the original question.

a. NPV would be positive and IRR would be 19.6%

b. NPV would be negative and IRR would drop to 6.23%

c. NPV would be positive and IRR would drop to 13.4%

d. NPV would be negative and the IRR would drop to 14.4%

Question 2

In addition to the assumption change in question 1, how would INCREASING the going out Cap Rate change the IRR and NPV?

	a.	NPV and IRR would become worse.
	b.	NPV would be better and IRR would be worse
	c.	NPV would be worse and the IRR would be better
	d.	NPV would stay the same and IRR would stay the same