You are evaluating the purchase of an apartment complex in East Memphis. It will cost...
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Accounting
You are evaluating the purchase of an apartment complex in East Memphis. It will cost $15 million to purchase and bring up to code. In Year 10 you will have to install a new roof at a cost of $5 million. Your net rental income should be $5 million per year for the 20-year life of the project. Use the MIRR method with a borrowing rate of 12% per year and a reinvestment rate of 18% per year to determine the external rate of return for this project. You must draw a correct cash flow diagram to get full credit for this problem and you must show your work. Excel solutions dont count.
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