Question

A $100,000 mortgage loan at 10.00% on a 25-year amortization schedule has been performing well. However, it is now 10 years later and interest rates have risen to 12.00%. The Bank that holds the mortgage loan wants to sell it and they are willing to take a discount. How much is the loan worth if you wanted to purchase it today? A real estate investment is available at an initial cash outlay of $10,000, and is expected to yield cash flows of $3,343 per year for five years. What is the internal rate of return (IRR)? An income-producing property is priced at $600,000 and is expected to generate the following NOI: Year 1: $42,000; Year 2: $44,000; Year 3: $45,000; Year 4: $50,000; and Year 5: $650,000. Would an investor requiring a return of 15% be wise to invest at the current price? What is the NPV?

          A $100,000 mortgage loan at 10.00% on a 25-year amortization
schedule has been performing well. However, it is now 10 years
later and interest rates have risen to 12.00%. The Bank that holds
the mortgage loan wants to sell it and they are willing to take a
discount. How much is the loan worth if you wanted to purchase it
today?
A real estate investment is available at an initial cash outlay
of $10,000, and is expected to yield cash flows of $3,343 per year
for five years. What is the internal rate of return (IRR)?
An income-producing property is priced at $600,000 and is
expected to generate the following NOI: Year 1: $42,000; Year 2:
$44,000; Year 3: $45,000; Year 4: $50,000; and Year 5: $650,000.
Would an investor requiring a return of 15% be wise to invest at
the current price? What is the NPV?

Added by Christine O.

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