2) If the discount rate is 7.5%, and you expect to hold the property for 5 years what is the most you are willing to pay for the property? Expected NOIs are listed below. The going in cap rate is 6%, and the terminal cap rate is 3%. Round final answer to nearest dollar. Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 NOI 56,000 58,000 60,000 62,000 64,000 66,000

6) What is the value of a property that you expect will generate NOI of $750,000 per year forever. The discount rate is 5%, you expect to hold the property for 12 years, and the terminal cap rate is 10%.

For questions 7-9 You just took out a 25-year $500,000 mortgage at 6% for 25 years. You purchased 4 points and are responsible for $15,000 in closing costs. 7) What are if the lenders yield? 8) What is the effect borrowing costs? 9) What is your remaining balance after 9 years?