After-tax cash flow will exceed before-tax cash flow whenever: Capital expenditures exceed net operating income Taxable income is negative The building is fully depreciated Interest and depreciation expenses are less than net' operating income Suppose a property has a cap rate of 8.5% and you can borrow at a mortgage constant of 8%. If you borrow 70% of the property price, what will be your equity yield? Excel Link: Excel Sheet.xlsx 1 Sheet.xls 8.50% 8.00% 9.67% 11.00%