Given the Following Information Regarding an Income Producing Property, Determine

question 18

Multiple Choice

Given the following information regarding an income producing property, determine the unlevered internal rate of return (IRR) . Expected Holding Period: 5 years; 1ˢᵗ year Expected NOI: $89,100; 2ⁿᵈ year Expected NOI: $91,773; 3ʳᵈ year Expected NOI: $94,526; 4ᵗʰ year Expected NOI: $97,362; 5ᵗʰ year Expected NOI: $100,283; Debt Service in each of the next five years: $58,444; Current Market Value: $885,000; Required equity investment: $221,250; Net Sale Proceeds of Property at end of year 5: $974,700; Remaining Mortgage Balance at end of year 5: $631,026.

• A) 10.6%
• B) 12.2%
• C) 22.9%
• D) 33.4%

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