$100,000 Innitial Investment
YEAR 1 2 3 4 5
Cashflows or annualized returns
EOY1=$8,392
EOY2=$8,560
EOY3=$8,731
EOY4=$8,906
EOY4=$9,084 + Reversion of $113,500
[list type=decimal]
[*]straight overall return divided by the number of years money is tied up=(122,584-100,000)/100,000=22.584% in 5 years, so average or annualized return is about 4.52%
[*]
IRR for the above cash flows is 10.87%.
Cash on Cash Plus=?
Overall Return/Years=57.173%, so annualized return=11.43% which is less then IRR as said
[/list type=decimal]
I am not sure answers are correct except IRR which is correct. Kindly explain.