Problem

You are considering the purchase of a small income- producing property for $150,000 that i...

You are considering the purchase of a small income- producing property for $150,000 that is expected to produce the following net cash flows.

End of Year

Cash Flow

1

$50,000

2

50,000

3

50,000

4

50,000

Assume your required internal rate of return on similar investments is 11 percent. What is the net present value of this investment opportunity? What is the going-in internal rate of return on this investment?

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Solutions For Problems in Chapter 14