All three questions below are tied to the data in question #1; Please answer all three.

Question 1(2 points)

You are analyzing an income property for which the following is projected:

• First year NOI = $100,000
• Constant annual increase in NOI = $4,000
• Loan to value ratio = .80
• Mortgage interest rate = 15%
• Mortgage term = 25 years
• Holding period = 7 years
• Appreciation in value over the holding period = 40%
• Equity yield rate = 20%
• Investor's marginal tax rate = 22%
• Equity dividend rate = 10%

What is the annual mortgage constant (f)?

Question 1 options:

1).202119

2).110168

3).154699

4).240360

5)None of the above

Question 2(2 points)

Based on the information in the above question (#1), what proportion of the mortgage is paid off during the holding period (Pn)?

Question 2 options:

1).052007

2).421556

3).947993

4)Can not be determined with the data given

5)None of the above

Question 3(2 points)

Again, using the information in question #1, what is the value for the J factor (J*)?

Question 3 options:

1).010051

2).812880

3)1.052432

4)1.091606

5)None of the above