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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

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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 (NO Tax) 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% 0. Assume Our Tax Rate is 30\%. Add or Subtract the Tax Cost or Benefit When Needed (TAX) 1. Round All Answers to the NEAREST Dollar. QUESTIONS - Input your Answers as a Number Only to the Nearest Dollar, No Commas, Decimals, or Dollar Signs. Show a Negative Number in Parens, Example =150=(150), Except Where it is Noted Otherwise. - Input your Answers as a Number Only to the Nearest Dollar, No Commas, Decimals, or Dollar Signs. Show a Negative Number in Parens, Example =150=(150), Except Where it is Noted Otherwise. Compute the PV,Present Value of the Down Payment = Compute the PV of the Principal Due to be Paid at the End = Compute the PV of the Mortgage Interest Cost = Compute the PV of the Property Taxes Cost = Compute the PV of the Repairs Cost = Compute the PV of the Rental Income = Compute the PV of the Sale of Rental Property = Compute the PV, +/() of the Depreciation Benefit = Compute the NPV, Net Present Value, of the Rental Investment Opportunity = Which Rate is Greater on this Investment IRR or COC? = Inp Compute the NPV. Net Present Value, of the Rental Investment Opportunity= Which Rate is Greater on this Investment IRR or COC? = . Input your Answer as either IRR or COC, all Caps. How Do you know the Answer to the Question Above? = Input your Answer with one of the Following; IRR >0 or IRR0 or COC0 or NPV0 or IRR0 or COC0 or NPVCOC or COC>IRR Compute the Net Cash Flow for this Capital Project = Ignore Time Value of Money? Input your Answer as a Number Only to the Nearest Dollar, No Commas, Decimals, or Dollar Signs. Show a Negative Number in Parens, Example =150=(150) Is this a Good Investment ? = Input your answer with either YES or NO. How Do you know the Answer to the Question Above? : Input your Answer with One of the Following; IRR >0 or IRR 0 or COC0 or NPVCOC or COC>IRR

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