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BECE Developments is considering purchasing a small commercial building located in Prince George that will...

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Accounting

BECE Developments is considering purchasing a small commercial building located in Prince George that will cost $800,000 and will require $125,000 in renovations immediately. Revenue from rent is estimated to be $200,000 a year.Expenses are estimated to be $50,000 a year. The company plans to keep the building for 6 years and estimates they will be able to sell the building for 25% more than the original purchase price.BECE wants to earn at least 20%.Assume expenses occur at the beginning of the year and revenue at the end of theyear.What is the IRR?O IRR=16.24%, earn possitive return, yes, investO IRR=16.06%, earn possitive return, yes, investO IRRE-8.15%, earn negative return, notinvestO IRR=16.24%, less than required 20%,
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