1. Calculate the Cap Rate for the following assumptions: Debt of 80% with financing terms of 3.00% and a 30-year amortization schedule. Equity returns are estimated at 15.00%.

2. A project is estimated to be worth $5,000,000 and generate $425,000 in NOI. A lender is willing to provide financing at an 80% LTV, 3.00% rate and 20-year amortization schedule. Calculate the Unlevered Return (an all-cash purchase with no debt financing) and the Levered Return (assuming Debt financing, based on the terms indicated).

3. You are an investor that is looking to purchase distressed property or notes. You come across a $100,000 mortgage loan at 4.00% on a 30-year amortization schedule which closed five days ago. Sudden changes in the market have driven interest rates to 6.00%. The investor is willing to sell the note at a 15% discount to the original face amount of $100,000.
   1. Would you buy the Note?
   2. Would you buy the Note if the discount was 25%?