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Your employer, Kent, LLC, is considering an investment in an office building that has the...

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Finance

Your employer, Kent, LLC, is considering an investment in an office building that has the following cash flows:

Purchase in Year 0 $ -2,750,000

Year 1. 180,000

Year 2.. 276,000

Year 3.. 220,000

Year 4 239,000

Year 5 250,000, and a sale @ $3,190,000 takes place EOY 5

The companys weighted average cost of capital that they use as their discount rate for such calculations is 8%

The project IRR is 10.96% it is asking for the leveraged IRR.

  1. What is the leveraged IRR of the project ?
    1. 32.15%
    2. 24.58%
    3. 21.48%
    4. 22.85%

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