1. William Smith, the junior partner in the firm of Jones, Brown, and Smith, has been offered, for $2.15 million, an apartment complex that in the following chart. The forecast incorporates a first mortgage loan of is expected to generate after-tax cash flows from operations as indicated $1.5 million. Smith expects to sell the property after seven years, and the best estimate of after-tax cash flow from disposal is $740,000. Expected After-Tax Cash Flow from Year Operations 1 $60,000 2 $70,000 3 $80,000 $87,000 3 5 $93,000 6 7 $99,000 $105,000 Using a 10% discount rate, compute the following: a. Net present value b. Profitability index c. Approximate investment value

1. William Smith, the junior partner in the firm of Jones, Brown, and Smith, has been offered, for $2.15 million, an apartment complex that in the following chart. The forecast incorporates a first mortgage loan of is expected to generate after-tax cash flows from operations as indicated $1.5 million. Smith expects to sell the property after seven years, and the best estimate of after-tax cash flow from disposal is $740,000. Expected After-Tax Cash Flow from Year Operations 1 $60,000 2 $70,000 3 $80,000 $87,000 3 5 $93,000 6 7 $99,000 $105,000 Using a 10% discount rate, compute the following: a. Net present value b. Profitability index c. Approximate investment value Llam 1? 1. William Smith, the junior partner in the firm of Jones, Brown, and Smith, has been offered, for $2.15 million, an apartment complex that in the following chart. The forecast incorporates a first mortgage loan of is expected to generate after-tax cash flows from operations as indicated $1.5 million. Smith expects to sell the property after seven years, and the best estimate of after-tax cash flow from disposal is $740,000. Expected After-Tax Cash Flow from Year Operations 1 $60,000 2 $70,000 3 $80,000 $87,000 3 5 $93,000 6 7 $99,000 $105,000 Using a 10% discount rate, compute the following: a. Net present value b. Profitability index c. Approximate investment value Llam 1