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QUESTION 3 Bob buys a property that costs $1,000,000. The property is projected to generate NOI as follows: Year NOI 1 $100,000 2 $105,000 3 $110,000 Bob 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 basis points lower than the cap rate at which he bought the property. Assume Bob finances his purchase with a 50% LTV Fixed Rate 10 loan at an annual rate of 5% with annual compounding and annual payments. What is Bob's annualized IRR for the investment in question? A. 78.93% B. 83.54% OC. 79.71%

QUESTION 3 Bob buys a property that costs $1,000,000. The property is projected to generate NOI as follows: Year NOI 1 $100,000 2 $105,000 3 $110,000 Bob 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 basis points lower than the cap rate at which he bought the property. Assume Bob finances his purchase with a 50% LTV Fixed Rate 10 loan at an annual rate of 5% with annual compounding and annual payments. What is Bob's annualized IRR for the investment in question? A. 78.93% B. 83.54% OC. 79.71%

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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QUESTION 3 Bob buys a property that costs $1,000,000. The property is projected to generate NOI as follows: Year NOI 1 $100,000 2 $105,000 3 $110,000 Bob 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 basis points lower than the cap rate at which he bought the property. Assume Bob finances his purchase with a 50% LTV Fixed Rate 10 loan at an annual rate of 5% with annual compounding and annual payments. What is Bob's annualized IRR for the investment in question? A. 78.93% B. 83.54% OC. 79.71% D. 52.38%
Transcribed Image Text:QUESTION 3 Bob buys a property that costs $1,000,000. The property is projected to generate NOI as follows: Year NOI 1 $100,000 2 $105,000 3 $110,000 Bob 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 basis points lower than the cap rate at which he bought the property. Assume Bob finances his purchase with a 50% LTV Fixed Rate 10 loan at an annual rate of 5% with annual compounding and annual payments. What is Bob's annualized IRR for the investment in question? A. 78.93% B. 83.54% OC. 79.71% D. 52.38%
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