1. A borrower made a mortgage loan 7 years ago for $160,000 at 10.25% interest for 30 years and is considering refinancing. The loan balance is now $151,806.62 and rates for this amount are currently 9.0% for 23 years. Origination fees and closing costs are $4,500 and these costs are not financed by the lender. What is the effective cost of refinancing?

Potential Gross Income 100,000 sq. ft for the coming year
average rent $15.00 per ft.	$ 1,500,000
Less Vacancy Allowance (average 8%)	$ (120,000)
Effective Gross Income	$ 1,380,000
Cleaning expenses (5% of net rev)	$ (69,000)
Insurance ($ 0.02 per dollar replacement, R.C. = $40 per ft.	$ (80,000)
Management & Maintenance (11% of revenue)	$ (151,800)
Reserve for Replacement (savings for major repairs)	$ (50,000)
Property Taxes ($0.10 per $100 of R.C.)	$ (4,000)
	$ (354,800)
Estimated Net Operating Income	$ 1,025,200

What is the NPV of this investment at a discount rate of 12% (use the purchase price from the question #1 above the balance sheet) ?