What is the internal rate of return on this potential


Suppose you have developed the following information for a potential investment:

Current market value is $1,200,000; anticipated loan to value ratio I s .80 with 2 points; and predicated cash flows of

ATCF1 = $38,560

ATCF2 = $41,780

ATCF3 = $37,210

ATCF4 = $39,127

ATER4 = $191,730

Further, assume the investor's minimum required after-tax rate of return on equity is 12%.

Please solve showing all steps:

a. What is the internal rate of return on this potential investment?

b. What is the profitability index on this investment?

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Financial Management: What is the internal rate of return on this potential
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