Assume that the loan interest rate is 6.0%, the Loan-to-Value is 75% and the term of the loan is 25 years (with monthly payments) Based on this information, answer the following five questions: (SHOW ALL WORK)

What is the NET future selling price at the end of year 4?

What is the outstanding loan balance at the end of year 4?

What is the amount of capital gains tax owed if sold at the end of year 4?

What is the NPV of this investment if the property is sold at the end of year 4?

What is the IRR of this investment if the property is sold at the end of year 4?

V. Property Proforma Analysis An investment property has the following characteristics, prices, rents, expenses and tax information (YELLOW boxes require computations): Total 1-BR 240 2-BR 60 Units in building Asking Price 1-BR Rent 2-BR Rent Rental Payments per year 52,500,000 1,650 2,095 Annual Gross Rent For 1-BR Units Annual Gress Rent For 2-BR Unit 12 Annual Inflation in Rents & Operating Expenses V&C Losses % of PGI op Exp % of EGI Property Tax Millage Annual Increase in Prop Tax Planned Holding Period Terminal Capitalization Rate Land % of Total Cost Depreciation Future Selling Price Selling Costs Net Selling Price Cap Gains Tax Rate Recapture Tax Rate Marginal Income Tax Rate AT Discount Rate 3,096 2.5% 26% 13 or 35% 4 years 7 5% 15% 27.5 years per year based on capitalizing Year 5 NOl of 3.00% equals equals 15% on 25% I 40%, 9.5% on ASSUME that the loan interest rate is 6.0%, the Loan-To-Value is 75% and the term of the loan is 25 years (with monthly payments) V. Property Proforma Analysis An investment property has the following characteristics, prices, rents, expenses and tax information (YELLOW boxes require computations): Total 1-BR 240 2-BR 60 Units in building Asking Price 1-BR Rent 2-BR Rent Rental Payments per year 52,500,000 1,650 2,095 Annual Gross Rent For 1-BR Units Annual Gress Rent For 2-BR Unit 12 Annual Inflation in Rents & Operating Expenses V&C Losses % of PGI op Exp % of EGI Property Tax Millage Annual Increase in Prop Tax Planned Holding Period Terminal Capitalization Rate Land % of Total Cost Depreciation Future Selling Price Selling Costs Net Selling Price Cap Gains Tax Rate Recapture Tax Rate Marginal Income Tax Rate AT Discount Rate 3,096 2.5% 26% 13 or 35% 4 years 7 5% 15% 27.5 years per year based on capitalizing Year 5 NOl of 3.00% equals equals 15% on 25% I 40%, 9.5% on ASSUME that the loan interest rate is 6.0%, the Loan-To-Value is 75% and the term of the loan is 25 years (with monthly payments)