1. An office building property can be purchased for $3.6 million. It is expected to generate annual NOIs of: Yr.1: $334,250; Yr.2: $344,275; Yr.3: $354,600; Yr.4: $365,250; Yr.5: $376,200; and is expected to be sold resulting in a net sale proceed in Yr. 5 of $3.8 million. Assume the project includes a $3.25 million loan having an annual debt service of $275,000 per year, and that the outstanding mortgage balance at the end of the five-year holding periods will be $3.0 million. Assume also that the overall capitalization rate is 9.0 percent; the investors required return on the project, unleveraged, is 12 percent; and the investors required return on the project, leveraged, is 18 percent. Using the appropriate information, determine the NET PRESENT VALUE of the project (UNLEVERED) by applying discounted cash flow analysis.

2. Given the cash flow estimates and assumptions provided in 23 above, what is the expected equity dividend rate (EDR) and debt coverage ratio (DCR) on the project in year one if the project is purchased at the price stated?

3. An office building property can be purchased for $3.6 million. It is expected to generate annual NOIs of: Yr.1: $334,250; Yr.2: $344,275; Yr.3: $354,600; Yr.4: $365,250; Yr.5: $376,200; and is expected to be sold resulting in a net sale proceed in Yr. 5 of $3.8 million. Assume the project includes a $3.25 million loan having an annual debt service of $275,000 per year, and that the outstanding mortgage balance at the end of the five-year holding periods will be $3.0 million. Assume also that the overall capitalization rate is 9.0 percent; the investors required return on the project, unleveraged, is 12 percent; and the investors required return on the project, leveraged, is 18 percent. Using the appropriate information, determine the IRR of the project (UNLEVERED). Indicate % return to two decimal places (e.g., 34.56%)