Alternative Two

After discussions with the owners, you decide to test the feasibility of an alternative course of action:

Perform a moderate renovation of common areas at a cost of $$150,000$ as well as a moderate upgrade

of the common exterior and landscape area at a cost of $$50,000,$ for total capital improvements

$($CAPEX$)$ of $$200,000.$

Based on your survey of comparable properties and your analysis of the supply, demand, and

absorption statistics, you conclude that the combination of these projects will increase the GPI by

$7\%$ per year $($instead of $5\%)$ starting next year. Vacancy and Collection loss is expected to remain

the same at $2\%$ of GPI $($with $5\%$ annual increase$).$ Expense escalations are projected to remain the

same annual increase$).$

What is midstream current equity?

What is midstream current Market Value?

What are the before$-$tax cash flows for the next five years?

What are the net sales proceeds at the end of the holding period?

Perform the Four Tests of Investment Return.

$\frac{\text{\$}}{\text{\$}}\%$ :

Value Enh:

NPV: $.$

IRR: