QUESTION 9Bob buys a property that costs $1,000,000. The property is projected togenerate NOI as follows:YearNOI$100,00012$105,0003$110,000Bob will own the property for two years.Bob will sell the property at the end of year 2 at a cap rate that is 250 basispoints lower than the cap rate at which he bought the property.What is Bob's annualized IRR for the investment in questionA. 26.21%B. 30.47%C. 27.78%D. 14.89%

IRR is rate of return at which present value of cash flow is equal to initial investment or we can…

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buys a property that costs $1,000,000. The property is p ate NOI as follows:

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

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