What is internal rate of return of real estate investment


Net Present Value and Internal Rate of Return

Response to the following problem:

A real estate investment requires an initial outlay of $200,000 in cash. The investment will return a single sum cash payment of $438,490 after five 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?

 

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Financial Accounting: What is internal rate of return of real estate investment
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