1. An investor bought an income producing property (an apartment) for $500,000 and intends to hold it for three years. The loan to value ratio is 80%. The investors also paid $5000 in points and renovate the property for $20,000. The investors required rate of return is 8%. The expected after-tax cash flow from operations are as follows:

Year 1 = $16,000

Year 2 = $14,000

Year 3 = $12,000

The cash flow from sale of the property in year 3 (after tax net reversion) = $268,183

a. Assuming the investor's required rate of return is 8% calculate the net present value(NPV) of the investment (5points)

b.Now calculate the total investment value of the project (3 points)

c. Calculate the profitability index of the project (3 points).