A Client Has Requested Advice on a Potential Investment Opportunity

question 21

Multiple Choice

A client has requested advice on a potential investment opportunity involving an income producing property.She would like you to determine the internal rate of return of the
Investment opportunity based on the following information.Expected Holding Period: 5 years;End of first year NOI estimate: $113,900;NOI estimates in subsequent years will grow by 5% per year;Price at which the property is expected to be sold at the end of year 5: $1,615,205.22;Current market price of the property: $1,475,667.71.

• A)-15.30%
• B)8.60%
• C)9.86%
• D)10.00%

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Definitions:

Red Light

A red light is commonly used in traffic signals to indicate a command to stop, or it can also refer to a wavelength of light perceived as red.

Conditioned Stimulus

A previously neutral stimulus that, after becoming associated with an unconditioned stimulus, evokes a conditioned response.

Neutral Stimulus

An object or event that initially produces no specific response other than focusing attention, until it is associated with a significant event.

Impending Occurrence

An event that is about to happen or is likely to happen shortly.