11. You are considering the purchase of a small apartment complex. The purchase price, including acquisition costs, is $1 million. Gross potential income in the first year is estimated at $175,000 and vacancy and collection losses are estimated to be 12 percent of gross potential income. Operating expenses and capital expenditures are expected to be $36,000 and $2,000, respectively, in year 1. . The investor will obtain a $700,000 loan with a 10-year term at 8 percent annual interest. The annual payments will be based on a 25-year amortization schedule. Additional upfront financing expenses will equal $25,000. Assume that 25 percent of the purchase price is payment for land and that the building will be depreciated over 27 years using straight-line depreciation. There is no personal property. Your ordinary and capital gain tax rates are 35 and 15 percent, respectively. a. Calculate the mortgage payment, the interest deduction, the depreciation deduction, and the amortized financing costs for the first year of operations. b. What will be your net equity investment at "time zero"? c. Estimate the after-tax cash flow for the first year of operations. 12. Compute the aftertov cash flow from the sale of the following nonresidential property: