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Ms. Brown estimates the following cash flow for the first five years of operations, with cash flow leveling off in year 5. Year Cash flow 1 = $695,000 2= 876,250 3= 1,057,500 4= 1,238,750 5= 1,420,000 1) Calculate the IRR and NPV of this project utilizing a 12% discount rate and a 15% cap rate. Ms. Brown was able to secure a loan for $1,540,000, and an equity investor agreed to invest the remaining $660,000 in exchange for 20% ownership in the project. (Show all work) 2) What is the loan-to-value ratio for this project? 3) What would the investor’s ROI be for this 5-year project? If the restaurant achieved its budgeted operating results for the year? 4) If the investor has a hurdle rate of 15%, does this project meet or exceed the investor’s requirements?Read more: http://www.justanswer.com/questions/2mv48-ms-brown-estimates-the-following-cash-flow-for-the-first-five#ixzz0qKY44oZQ
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