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Question
A client has requested advice on a potential investment opportunity involving an income producing property. She would like you to determine the internal rate of return of theinvestment opportunity based on the following information. Expected Holding Period: 5 years; End of first year NOI estimate: $113,900; NOI estimates in subsequent years will grow by 5% per year; Price at which the property is expected to be sold at the end of year 5: $1,615,205.22; Current market price of the property: $1,475,667.71.
A. -15.30%
B. 8.60%
C. 9.86%
D. 10.00%
Answer
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