7. A property that can be purchased for $1.7 million has an expected first- year net operating income of $190,000. An investor is considering two loan alternatives: A 70 percent loan-to-value ratio, with interest at 7.5 percent per annum. The loan will require level monthly payments to amortize the principal over 20 years. An 80 percent loan-to-value ratio, with interest at 8 percent per annum. This loan will require level monthly payments to amortize the principal over 25 years. Loan A: Loan B: Required: For each loan, determine: a. The expected before-tax cash flow (net operating income minus annual debt service) as a percentage of the equity investment. the actual net operating income falls 10 percent below expectations. expectations before it is just sufficient to provide for annual debt service. b. The actual before-tax cash flow as a percentage of the equity investment, it c. The percentage by which actual net operating income can fall below