Given the following information regarding an income producing property,determine the unlevered internal rate of return (IRR) .Expected Holding Period: 5 years;1^st year Expected
NOI: $89,100;2^nd year Expected NOI: $91,773;3^rd year Expected NOI: $94,526;4^th year Expected NOI: $97,362;5^th 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.

Question

Quizplus · Accepted Answer

The unlevered IRR is calculated using the cash flows without considering the debt. The cash flows are the NOIs for each year and the net sale proceeds at the end of year 5. The IRR that equates these cash flows to the initial market value of $885,000 is approximately 12.2%.

Given the Following Information Regarding an Income Producing Property,determine the Unlevered