1 increase; increase 2 increase; remain unchanged 3 increase; decrease 4 remain unchanged; increase 5 remain unchanged; remain unchanged 6 remain unchanged; decrease 7 decrease; increase 8 decrease; remain unchanged 9 decrease; decrease(CHAPTER 10) This is the easiest question because you have to pretty much replicate what we did in the last numerical example in Chapter 10 PowerPoint! This is the most difficult question because all sub-questions are connected: if you make a mistake in the first part, Mortgage-Equity Capitalization (7 of 15) the rest will be incorrect as well. So, be careful! Check your math! EXAMPLE An income property for sale is expected to generate NOI of $50,000 in the 1st year, increasing by 3% per So, here's what I want you to do: year. An investor is considering buying it for a 5-year holding period. Re-do the problem in Chapter 10 Powerpoint slides 78-85, EXCEPT the NOI for the first year is not $50,000 but double that The investor is planning to finance the purchase using 1st-year DCR = 1.2, as required by the lender. ($100,000), AND the loan is an interest-only loan. The loan will be based on a 20-year amertization term, 10% annual rate of interest, & will require If you can, do the math in Excel with correct referencing to cells with intermediate results. This will allow you to avoid rounding monthly payments errors. Otherwise, increase decimal places - the more the better! Say, 6 or even higher. The terminal cap rate for the property is 11% Investors require a 12% return on equity for this type of property Your answers: Dr. Ekaterina Chemobai D. 78 (Question 1) I don't need your answers for this one. But the answers to this question are used to solve Question 2! (Question 2) Your answer is $ Round to whole dollar. Don't put "$". (Question 3) Your answer is $ Round to whole dollar. Don't put "$". (Question 4) Your answer is $ Round to whole dollar. Don't put "$". (Question 5) Your answer is %. Round to 2 decimal places. Don't put "%". E.g., for 1.23% put 1.23. Question 6) Your answer is %. Round to 2 decimal places. Don't put "%". E.g., for 1.23% put 1.23. (Question 7) Your answer is %. Round to 2 decimal places. Don't put "%". E.g., for 1.23% put 1.23