An investor is considering buying a residential income property for $500,000, and holding it for three years. The expected equity cash flows after tax (ATCF) are:
Year 1 = $16,000
Year 2 = $14,000
Year 3 = $12,000
A 75% of value mortgage is available; the remaining balance, after 3 years, will be $365,501. Total depreciation to be taken over the holding period will equal $43,636 on improvements with a beginning basis of $400,000. The investor is in the 28% capital gain tax bracket while the depreciation recapture rate is 25% in this period, and desires a 12% after tax return on the investment. The property is expected to sell for $575,000; there will be a 6% sales commission. Based on tax laws assumed here, what are the total CASH proceeds from the sale?

$146,928

$152,750

$154,249

$151,441

$158,245