Solution-What is irr, 1. You pay $1m for a property with 9%

What is irr

Assignment Help Finance Basics

Reference no: EM133112690

1. You pay $1m for a property with 9% cap rate, keep it for 5 years, and sell at the end of year 5 at the same cap rate. The selling costs are 5% of the price. What is your IRR? Enter your answer in percent, but without percent sign.

2. You are doing the same as above but instead of paying cash, you take a 70% LTV IO loan at 5% annual rate. What is your IRR?

3. In addition to the loan above you take a mezzanine IO loan of $200k at 8% annual rate. What is your IRR? The neighborhood is declining, so your selling cap rate is 11% in questions 10-13. You have limited liability: you can walk away anytime. If you walk away in year t, all cash flows starting year t become zero (including year t).

4. You pay cash as in Question 1 above. What is your IRR?

5. You take the loan as in Question 2 above. What is your IRR?

6. You take an additional mezzanine loan as in Question 3 above. What is your IRR?

Reference no: EM133112690

Questions Cloud

What is barker required rate of return : Barker Corp. has a beta of 1.10, the real risk-free rate is 2.00%, investors expect a 3.00% future inflation rate, and the market risk premium is 4.70%.

Explain investor maximized utility from investments : Consider a market where the risk-free rate is 0.03 and the market portfolio has an expected return of 0.11 and a return variance of 0.04. An investor has the me

Define the term supply chain and holistic marketing : Define the term supply chain. What is meant by holistic marketing? What is the task environment? What is the Product Market Expansion Grid?

Case study of weber interstate paving co : Weber Interstate Paving Co. had $450 million of sales and $225 million of fixed assets last year, so its FA/Sales ratio was 50%. However, its fixed assets were

What is irr : 1. You pay $1m for a property with 9% cap rate, keep it for 5 years, and sell at the end of year 5 at the same cap rate. The selling costs are 5% of the price.

By what amount must inventory reduced : If the sale referred to above was a downstream sale, by what amount must Inventory on the consolidated balance sheet be reduced

Intrinsic value of bhb ordinary share : (a) BH Berhad (BHB) just paid a dividend of RM2. They have just released a new product that will cause the firm (and dividends) to grow by 20% for the next two

Creating hypothetical scenario : QUESTION: Creating hypothetical scenario that explain financial management below:

What price should marley offer in the repurchase : What price should Marley offer in the repurchase so that the post-repurchase stock price is the same as the repurchase price?

User Account

All Pages

What is irr

Reference no: EM133112690

Reference no: EM133112690

Questions Cloud

Reviews

Write a Review

Finance Basics Questions & Answers

Financial reporting and analysis

A report on financial accounting

Describe the types of financial ratios

Differences between sole proprietorship and corporation

Prepare a cash budget statement

What are the implied interest rates

State pricing theory and no-arbitrage pricing theory

Small business administration

Effect of financial leverage

Evaluate the basis for the payment to the lender

Importance of opps, ipps, mpfs and dmepos

Time value of money

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT