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Question
Suppose an investor is interested in purchasing the following income producing property at a current market price of $2,500,000. The prospective buyer has estimated the expected cash flows over the next four years to be as follows: Year 1 = $100,000, Year 2 = $150,000, Year 3 = $200,000, Year 4 = $250,000. If the estimated proceeds from selling the property at the end of year four is $3,000,000, what is the internal rate of return (IRR) of the project?
A. -33.93%
B. 5.72%
C. 8.99%
D. 10.99%
Answer
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Related questions
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