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Can you calculate f ) and g ) please? On the left there's the assumptions and on the right is how I need to complete
Can you calculate f and g please? On the left there's the assumptions and on the right is how I need to complete it Thank you!assumptions to complete the analysis below:
The assumed purchase price is $ million
Potential gross income PGI for the first year of operations is projected to be
$
PGI is expected to increase percent per year.
Vacancies are expected to be percent of PGI.
Operating expenses are estimated at percent of effective gross income.
The holding period is five years.
The market value of the property is expected to increase percent per year.
Selling expenses will be percent when the property is sold at the end of the
year.
The appropriate rate of return to discount projected NOIs and the projected NSP
is percent.
The appropriate rate of return to discount projected BTCFs and the projected
BTER is percent.
percent of the purchase price can be borrowed with a year, monthly
payment mortgage.
The annual interest rate on the mortgage will be percent.
Financing costs will equal percent of the mortgage amount.
a Develop a cash flow statement showing NOI for each of the five years.
b Calculate the net selling price from the sale of the property at the end of the fifth
year.
c Calculate the net present value and the internal rate of return of this investment
assuming no mortgage debt. Should you purchase? Why?
d Calculate the monthly mortgage payment. What is the total per year?
e Calculate the remaining loan balance at the end of years and
f Calculate the amount of principal reduction achieved during each of the five
years.
g Calculate the total interest paid during each of the five years. Remember the debt
service equals principal plus interest.
h Calculate the required initial equity investment.
i Calculate the beforetax cash flows BTCF from operations for each of the five
years.
j Calculate the beforetax equity reversion BTER from the sale of the property.
k Calculate the net present value and the internal rate of return on the equity
investment. Should you purchase? Why?
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