2. Assume the following information about a commercial warehouse facility. Original cost $ 1,500,000 Book value 0 Market value $ 1,800,000 Value of the building $ 1,500,000 Value of the land $ 300,000 Annual depreciation Debt $ 100,000 Page 1 of 2 12% 10 years Rate Term Payment Investor's tax rate Year 1 NOI Growth in NOI $ 17,698 15% 338.900 0% a. b. C. Calculate the after-tax cash flows from operations for the next ten years. Assuming the investor has a 12 percent required rate of return (discount rate), calculate the present value of the after-tax cash flows from operations for the 10 year period Calculate the after-tax cash flows from a sale-leaseback assuming: an annual lease expense of $275,000, the property is sold in period 0 for $1,800,000, and repurchased for $1,800,000 in year 10. Assuming a 12 percent discount rate calculate the present value of the after-tax cash flows from operations for the 10 year period under this set of assumptions. Calculate the cash flows to the buyer-lessor. (Assume the buyer-lessoris in the 15 percent tax bracket). Assuming that the buyer-lessor has a discount rate of 12 percent calculate the present value of the cash flows. Assuming no objections to the arrangement from the IRS, should the sale- leaseback be undertaken? Why or why not? d. e f