Consider the following information: Purchase Price: 750,000 financed 80% at 7% rate of interest for 25 years (amortized monthly)

Remaining After-tax Cash Flow from Operations - year 1: $33,000

Remaining After-tax Cash Flow from Operations - year 2: $22,000

Remaining After-tax Cash Flow from Operations - year 3: $31,000

Remaining After-tax Cash Flow from Operations - year 4: $28,000

Remaining After-tax Cash Flow from Operations - year 5: $26,000

Remaining After-tax Cash Flow from Operations - year 6: $30,000

Remaining After-tax Cash Flow from Operations - year 7: $32,000

a- Calculate the owner's equity (round to nearest dollar).

b- Calculate the financed amount (round to nearest dollar).

c- Scenario A: The investor decides to sell the property at the end of year 4 for $900,000. Calculate the loan payoff at the point of sale (this is a balloon payment calculation) --- round answer to the nearest dollar.

d- Calculate the IRR under Scenario A (round to tenth of a percent).

e- Scenario B: The investor decides to sell the property at the end of year 7 for $1,100,000. Calculate the loan payoff at the point of sale (this is a balloon payment calculation) --- round answer to the nearest dollar.

f- Calculate the IRR under Scenario B (round to tenth of a percent).

g- Which alternative Scenario A or Scenario B is probably the most desirable?