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Complete the following problems using the information given below: Total Project Cost: $50,000,000 Lender Standards: o Interest Rate: 9.0% o Amortization Rate: 20 Yrs. o
Complete the following problems using the information given below: Total Project Cost: $50,000,000 Lender Standards: o Interest Rate: 9.0% o Amortization Rate: 20 Yrs. o Debt service coverage ratio: 1.25 o Debt-to-cost ratio Projected annual cash flow of project: $4,250,000 Investors' Hurdle Rate: 12% Tax Rate: 30% Cap Rate 9% Sale in Year 10 70% 1. Calculate the maximum amount of money you can borrow based on the lenders debt to cost ratio. 2. Calculate the amount of annual debt service based on the loan terms offered. 3. Confirm that the debt service coverage ratio required by the lender is met. 4. Calculate the amount of equity required. 5. Calculate the weighted average cost of capital. 6. Calculate the net present value of the project assuming a sale in year 10. 7. Calculate the internal rate of return. Complete the following problems using the information given below: Total Project Cost: $50,000,000 Lender Standards: o Interest Rate: 9.0% o Amortization Rate: 20 Yrs. o Debt service coverage ratio: 1.25 o Debt-to-cost ratio Projected annual cash flow of project: $4,250,000 Investors' Hurdle Rate: 12% Tax Rate: 30% Cap Rate 9% Sale in Year 10 70% 1. Calculate the maximum amount of money you can borrow based on the lenders debt to cost ratio. 2. Calculate the amount of annual debt service based on the loan terms offered. 3. Confirm that the debt service coverage ratio required by the lender is met. 4. Calculate the amount of equity required. 5. Calculate the weighted average cost of capital. 6. Calculate the net present value of the project assuming a sale in year 10. 7. Calculate the internal rate of return
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