Calculate the unlevered internal rate of return irr

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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: EM131144951

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