Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. only finding the irr and mirr an investor is evalu

only finding the irr and mirr An investor is evaluating the profitability of an anticipated...

50.1K

Verified Solution

Question

Accounting

only finding the irr and mirr An investor is evaluating the profitability of an anticipated land investment with an asking price of $2,000 per acre. There is a current net cash flow of $120 per acre. The investor plans on holding the investment for 10 years and has a 5% real cost of capital. The anticipated inflation rate is 4% which equally affects net cash flows, and the cost of capital. The land values are expected to grow at 6% annually. The investors tax rate is 20%. Assume that the investor pays 20% down payment and takes out a loan for the rest at 11% interest with equal payments over 30 years. What is the IRR and MIRR of this investment? Is this a profitable investment? A feasible investment? why or why not?

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Medical Sciences
1.2K views

1. Outline the physiology of inspiration vs. expiration. Consider these things: the muscles involved, if these...

Geometry
1.2K views

D AA sh sh O has 4 distinct zeros Which of the following graphs could...

Statistics
1.2K views

c How big does the return have to be to put a domestic stock fund...

Statistics
1.2K views

You may need to use the appropriate appendix table or technology to answer this question...

Algebra
1.2K views

ladley puts 300 in a savings account earning 1 annual interest and 300 in an...

Accounting
1.2K views

+ ID Page view | A Read aloud | Add text | Drau...

Accounting
1.2K views

Builder Products, Incorporated, uses the weighted-average method in its process costing system. It manufactures a...

Accounting
1.2K views

The Morenz Company purchases equipment at the beginning of the fiscal year for $320,000; the...

Accounting
1.2K views

payments completed by Happy Tails Inc. during the month of September 20 Y 4 are...

Accounting
1.2K views

At the year-end, an impairment review is being conducted on a 80%-owned subsidiary. At the...

Accounting
1.2K views

The matching principal requires that expenses be matched with revenues f or t

Accounting
1.2K views

18. Gathering evidence as part of an audit involves a mix of techniques that are...