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Calculate the unlevered internal rate of return irr

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Reference no: EM13573999

An office building is purchased with the following projected cash flows:

· NOI is expected to be $130,000 in year 1 with 5 percent annual increases.

  • The purchase price of the property is $720,000.
  • 100% equity financing is used to purchase the property

· The property is sold at the end of year 4 for $860,000 with selling costs of 4 percent.

  • The required unlevered rate of return is 14 percent.

a. Calculate the unlevered internal rate of return (IRR).

b. Calculate the unlevered net present value (NPV).

Reference no: EM13573999

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