What is the net present value of this real estate investment


Problem:

Net Present Value and Internal Rate of Return

A real estate investment requires an initial outlay of $150,000 in cash. The investment will return a single sum cash payment of $606,796 after 10 years. The rate of return required on projects as risky as this one is 18%.

1. What is the net present value of this real estate investment?

2. What is the internal rate of return of this real estate investment?

3. Is this an attractive investment? Why or why not?

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Finance Basics: What is the net present value of this real estate investment
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