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Brown estimates the following cash flow for the first five years of operations, with cash flow leveling off in year 5.
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
