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Calculate in excel the npv and irr of this investment

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Reference no: EM132959090

Scenario - You've spent $25,000 searching for an investment property. Now, you're considering investing in a cottage near Brighton Beach. You can buy the house for $300,000 with cash, earn $19,090 per year in rent and pay $8,000 per year in HOA, taxes and other expenses. Assume you'll be able to sell the house in ten years for $400,000.

1. Calculate in Excel the NPV (assume you need to earn at least 5%) and IRR of this investment. Is this a good investment?

2. Now, assume that you must spend $100,000 in year 10 to raise the house on stilts due to sea-level rise from a warming planet, What are the NPV and IRR in this scenario? Is the cottage a good investment now?

3. You must submit an Excel worksheet for this assignment. Check your work for completeness, accuracy, spelling, grammar before submitting it.

Reference no: EM132959090

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