Answer the Questions Below using the Following Information. We have the Option to Invest in a Rental Property with a Plan to Sell the Property at the End of 15 Years. 1. The Cost to Purchase the Rental Property is $250,000, and requires a Cash Down Payment of 30% Due Now Today (NO Tax) 2. The 70% Principal Balance will be paid to the Bank when we SELL the property at END (NOTax) 3. The Interest Only Mortgage Payments are $9,000 Per Year (TAX) 4. County Property Tax Payments are $3,500 Per Year (TAX) 5. Extensive Repairs are predicted in Year 8 at a Cost of $20,000 (TAX) 6. Rental Income is $18,000 Per Year (TAX) 7. It is estimated that the Rental Property can be sold in 15 Years for $300,000 (NO Tax) 8. Depreciation Expense is a Deduction for Taxes at $10,000 per Year (250k/25Yr Life =10k ) (TAX) 9. Assume Our Cost of Capital or Our Required Rate of Return is 10\% 10. Assume Our Tax Rate is 30%. Add or Subtract the Tax Cost or Benefit When Needed (TAX) 11. Round All Answers to the NEAREST Dollar. Comouste the PV of the finials Cont - Compite the Py of the foerial inconve = Comsute the PV ot the Sale of Rental Proceriy * Compute the PV, +FJ of the Deprecistise Beneft = Comoute the NPV, Net Present Yalue, of the Rontal inventmest Oreprianity : Which Rate is Greater on this investenent tRQ or COCT Ingot Yout Antwer as eitter IRA or COC, all Cavs. How Do you know the Anwer ts the Question Above? a Input COCO of NPV>0 or NPV 0 Is the IRR for this imestment Greaser than 10047= Answer with either Yes or NO. How Do you know the Antwer to the Question Abovel NPYN 0 or NPN 0 or IRRACDC or COC.IRR Compute the Net Cash Flow for this Capital Project ! Imore Time Value of Monep? Input your Answer as a Number Only to the Nearnst Deslar, Mo Commat. Decimats, of Dollar Slens. Show a Negative Namber it Parem, Example a 150=1+509 b this a Good imvestment? a input your anwwer with ether yes or 140 : Answer the Questions Below using the Following Information. We have the Option to Invest in a Rental Property with a Plan to Sell the Property at the End of 15 Years. 1. The Cost to Purchase the Rental Property is $250,000, and requires a Cash Down Payment of 30% Due Now Today (NO Tax) 2. The 70% Principal Balance will be paid to the Bank when we SELL the property at END (NOTax) 3. The Interest Only Mortgage Payments are $9,000 Per Year (TAX) 4. County Property Tax Payments are $3,500 Per Year (TAX) 5. Extensive Repairs are predicted in Year 8 at a Cost of $20,000 (TAX) 6. Rental Income is $18,000 Per Year (TAX) 7. It is estimated that the Rental Property can be sold in 15 Years for $300,000 (NO Tax) 8. Depreciation Expense is a Deduction for Taxes at $10,000 per Year (250k/25Yr Life =10k ) (TAX) 9. Assume Our Cost of Capital or Our Required Rate of Return is 10\% 10. Assume Our Tax Rate is 30%. Add or Subtract the Tax Cost or Benefit When Needed (TAX) 11. Round All Answers to the NEAREST Dollar. Comouste the PV of the finials Cont - Compite the Py of the foerial inconve = Comsute the PV ot the Sale of Rental Proceriy * Compute the PV, +FJ of the Deprecistise Beneft = Comoute the NPV, Net Present Yalue, of the Rontal inventmest Oreprianity : Which Rate is Greater on this investenent tRQ or COCT Ingot Yout Antwer as eitter IRA or COC, all Cavs. How Do you know the Anwer ts the Question Above? a Input COCO of NPV>0 or NPV 0 Is the IRR for this imestment Greaser than 10047= Answer with either Yes or NO. How Do you know the Antwer to the Question Abovel NPYN 0 or NPN 0 or IRRACDC or COC.IRR Compute the Net Cash Flow for this Capital Project ! Imore Time Value of Monep? Input your Answer as a Number Only to the Nearnst Deslar, Mo Commat. Decimats, of Dollar Slens. Show a Negative Namber it Parem, Example a 150=1+509 b this a Good imvestment? a input your anwwer with ether yes or 140
