Calculate the npv of project

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You are considering the purchase of an apartment complex. • Purchase price: $775,000 • Holding period is four years • Cap rate is expected to be 7% in year 4 • Selling expenses will be 5% of the sale price • The 4-year Treasury bill rate is 3% and your risk premium for this project is 8% a) Calculate the NPV of this project assuming that you do not take any mortgages b) You take a $620,000 mortgage. Your annual debt payment is $54,593. The outstanding loan balance at the end of year 4 is $596,558. Calculate the NPV of this project.

Reference no: EM132896179

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