What is the internal rate of return

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Reference no: EM131806938

An apartment building in your neighborhood is for sale for $140,000. The building has four units, which are rented at $500 per month each. The tenants have long-term leases that expire in 5 years. Maintenance and other expenses for care and upkeep are $8000 annually. A new university is being built in the vicinity and it is expected that the building could be sold for $160,000 after 5 years.

(a) What is the internal rate of return for this investment?

(b) Should this investment be accepted if the other options have a rate of return of 12%?

Reference no: EM131806938

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