Use the following information to solve for both the levered and unleved NPV & IRR Please note: mortgage and income numbers are to be annual numbers, not monthly

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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Use the following information to solve for both the levered and unleved NPV & IRR
Please note: mortgage and income numbers are to be annual numbers, not monthly
Potential Investment
Purchase Price
Years:
LTV
Rate
Ongination Expenses
ΝΟΙ
Required Return Levered
Required Return Un-Levered
Expected Price Appreciation)
Selling expenses
Expected holding period
Price:
Mortgage
Loan Exp
CFO
Loan Information
N
IN
0
$700,000.00
30
80.0%
7.0%
3.0%
$75,000.00
13,0%
10.0%
4.0%
5.0%
2
100%
PV
PAID ANNUALLY
of the loan amount
Per Year
Years
of the sale price
Years
NOI
MTG Pynt
CF1
PMT
EV
NOI
MTG Pymt
Net Sales Price:
Mortgage Payoff
CF2
Levered
CF-0
CF-1
CF-2
NPV =
IRR =
Un-Levered
CF-0
CF-1
CF-2
NPV =
IRR=
Equity Reversion
Sale Price
Selling Expenses
Net Sales Price
Mortgage Payoff
BTER
Transcribed Image Text:Use the following information to solve for both the levered and unleved NPV & IRR Please note: mortgage and income numbers are to be annual numbers, not monthly Potential Investment Purchase Price Years: LTV Rate Ongination Expenses ΝΟΙ Required Return Levered Required Return Un-Levered Expected Price Appreciation) Selling expenses Expected holding period Price: Mortgage Loan Exp CFO Loan Information N IN 0 $700,000.00 30 80.0% 7.0% 3.0% $75,000.00 13,0% 10.0% 4.0% 5.0% 2 100% PV PAID ANNUALLY of the loan amount Per Year Years of the sale price Years NOI MTG Pynt CF1 PMT EV NOI MTG Pymt Net Sales Price: Mortgage Payoff CF2 Levered CF-0 CF-1 CF-2 NPV = IRR = Un-Levered CF-0 CF-1 CF-2 NPV = IRR= Equity Reversion Sale Price Selling Expenses Net Sales Price Mortgage Payoff BTER
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