An office building is purchased with the following projected cash flows:

• NOI is expected to be $100,000 in year 1 with 5 percent annual increases.

• The purchase price of the property is $800,000.

• 100 percent equity financing is used to purchase the property.

• The property is sold at the end of year 4 for $950,000 with selling costs of 4 percent.

• The required unlevered rate of return is 12 percent.

Answer the following questions:

a, What are the Net Operating Income (NOI) for year 1 to 4?

Year 1: $Answer 1

Year 2: $Answer 2

Year 3: $Answer 3

Year 4: $Answer 4

b, What is the Net Selling Proceeds (NSP) at year 4?

$Answer 5

c, What is the present value of the total cash inflows?

$Answer 6

d, What is the unlevered net present value (NPV)?

$Answer 7