58 599
Assignments Done
Successfully Done
In March 2018
Your physics homework can be a real challenge, and the due date can be really close — feel free to use our assistance and get the desired result.
Be sure that math assignments completed by our experts will be error-free and done according to your instructions specified in the submitted order form.
Our experts will gladly share their knowledge and help you with programming homework. Keep up with the world’s newest programming trends.

Answer on Finance Question for DixitM

Question #33141
Rafael owned an apartment building that burned down. The empty lot is worth $70,000 and Rafael has received $200,000 from the insurance company. Rafael plans to build another apartment building that will cost $275,000. His real estate adviser estimates that the expected value of the finished building on the real estate market will be $385,000 next year. The discount/interest rate is 10%? What are the NPV and IRR of this decision?
Expert's answer
PV of a finished building PV=385000/1.1=350000. So, NPV of the project NPV=350000-275000=75000.
To calculate IRR we solve an equation 275000=385000/(1+r),r=(85000-275000)/275000=40%.

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!


Assignment Expert
05.12.2016 12:36

Dear Aswathy, please use panel for submitting new questions

05.12.2016 09:29

Roxanne invested $560,000 in a new business 7 years ago. The business was expected to bring in $8,000 each month for the next 26 years (in excess of all costs). The annual cost of capital (or interest rate) for this type of business was 7% with monthly compounding. What is the value of the business today? (Enter just the number in dollars without the $ sign or a comma and round off decimals to the closest integer, i.e., rounding $30.49 down to $30 and rounding $30.50 up to $31.)

Leave a comment

Ask Your question