considering the purchase of an industhal You have decided to finance the acquisition with a $800,000 loan, 7 percent interest rate, 30-year term, and annual interest hyments (.e., the annual payment will not include any amortization of principal). There are $50,000 in up-front financing costs timate the following cash flows for the first year of operations: $ ctive gross income rating expenses 135.000 23,000 112,000 $ Culote the overall rate of return for "going in cop rate") 11.769 11.20% none here 12.88% 10.64% ratin ate the debt coverage ratio. 90 12.00 170 12.10 none here the largest loan that you can obtain (holding the other terms constant) if the lender requires a debt service coverage ratio of 27 $1,400,000 $1,333,333 $1,533,333 none here $1,666,666 You are considering the purchase of an industrial warehouse. The purchase price is $1 million. You expect to hold the property for five years. You have decided to finance the acquisition with a $800,000 loan, 7 percent interest rate, 30 year term and annual interest only payments (ie, the annual payment will not include any amortization of principal). There are $50.000 in up-front financing costs You estimate the following cash flows for the first year of operations $ Effective gross income Operating expenses NOV 135,000 23,000 112,000 $ Calculate the overall rate of return (or going in cap rate") 1176% 11.20% none here 12 88% 10.64 Calculate the debt coverage ratio considering the purchase of an industhal You have decided to finance the acquisition with a $800,000 loan, 7 percent interest rate, 30-year term, and annual interest hyments (.e., the annual payment will not include any amortization of principal). There are $50,000 in up-front financing costs timate the following cash flows for the first year of operations: $ ctive gross income rating expenses 135.000 23,000 112,000 $ Culote the overall rate of return for "going in cop rate") 11.769 11.20% none here 12.88% 10.64% ratin ate the debt coverage ratio. 90 12.00 170 12.10 none here the largest loan that you can obtain (holding the other terms constant) if the lender requires a debt service coverage ratio of 27 $1,400,000 $1,333,333 $1,533,333 none here $1,666,666 You are considering the purchase of an industrial warehouse. The purchase price is $1 million. You expect to hold the property for five years. You have decided to finance the acquisition with a $800,000 loan, 7 percent interest rate, 30 year term and annual interest only payments (ie, the annual payment will not include any amortization of principal). There are $50.000 in up-front financing costs You estimate the following cash flows for the first year of operations $ Effective gross income Operating expenses NOV 135,000 23,000 112,000 $ Calculate the overall rate of return (or going in cap rate") 1176% 11.20% none here 12 88% 10.64 Calculate the debt coverage ratio
