What is the npv of a deal

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Question: Suppose a certain property is expected to produce net operating cash flows annually as follows, at the end of each of the next five years: $35,000, $37,000, $45,000, $46,000, and $40,000. In addition, at the end of the fifth year, we will assume the property will be (or could be) sold for $450,000.

a. What is the NPV of a deal in which you would pay $400,000 for the property today assuming the required expected return or discount rate is 12% per year?

b. If you could get the property for only $375,000, what would be the expected IRR of your investment? A 100,000-SF space is expected to rent in five-year fixed-rent leases successively in perpetuity

Reference no: EM131734170

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