7. You are considering the purchase of an apartment complex. The following assumptions are made: The purchase price is $1,000,000 Potential gross income (PGI) for the first year is projected to be $171,000. PGI is expected to increase at 4.00% per year. No vacancies are expected. Operating expenses are estimated at 35% of effective gross income. The market value of the investment is expected to increase 4.00% per year. Selling expenses will be 4.00%. The holding period is 4 years. . The appropriate unlevered rate of return is 12.00%. The required levered rate of return is 14.00%. 70 percent of the acquisition price can be borrowed with a 30-year mortgage. The annual interest rate on the mortgage will be 8.00%. Financing costs will equal 2.00% of the loan amount. There are no prepayment penalties. 13481,76 . . SE ME VOTO e. Calculate the monthly mortgage payment. What is the annual debt service? f. Calculate the remaining principal balance at the end of year 4. g. Calculate the initial equity investment, assuming you're using debt financing. h. Calculate the before tax levered cash flow. 1. Cal tax net ne 7. You are considering the purchase of an apartment complex. The following assumptions are made: The purchase price is $1,000,000 Potential gross income (PGI) for the first year is projected to be $171,000. PGI is expected to increase at 4.00% per year. No vacancies are expected. Operating expenses are estimated at 35% of effective gross income. The market value of the investment is expected to increase 4.00% per year. Selling expenses will be 4.00%. The holding period is 4 years. . The appropriate unlevered rate of return is 12.00%. The required levered rate of return is 14.00%. 70 percent of the acquisition price can be borrowed with a 30-year mortgage. The annual interest rate on the mortgage will be 8.00%. Financing costs will equal 2.00% of the loan amount. There are no prepayment penalties. 13481,76 . . SE ME VOTO e. Calculate the monthly mortgage payment. What is the annual debt service? f. Calculate the remaining principal balance at the end of year 4. g. Calculate the initial equity investment, assuming you're using debt financing. h. Calculate the before tax levered cash flow. 1. Cal tax net ne