City's Balance sheet total assets are $4,500m, Suppose further that interest-bearing liabilities equal 40% of total assets. City's manager is contemplating expanding the Trust's investment portfolio and provides the following information: total acquisition cost of the expansion will be $2,000m City's in-house maximum debt to asset target ratio is 48% the going market LVR is 70% What is the structure of the new financing arrangements likely to be? Show all workings clearly.

Now,assume the following:

1. loan interest can be fixed at 7.5%pafor the next 3 years
2. initial distribution to equity of 8% is required
3. management fee is 1%
4. 80% of the new investment will be leased for $100m pa
5. estimated rent on vacant areas will be $25m pa
6. a vacancy rate of 12% is expected

ii.Comment on the feasibility and prospects of the proposed expansion.Show all workings clearly.