Evaluate the purchase of an existing 900 unit apartment complex for $5000000, the building is assumed to have a 20 year functional life. Treat the rents as being collected at the end of each year, along with associated variable and fixed costs. Assume rent controls will prohibit the rent from being raised over the life of the building. Assume that the underlying property reverts to the original owners at the end of twenty years, and that you will also be responsible for demolition and clean-up costs, to be incurred at the end of the buildings life. - Rentals are estimated at 810 units per year - Each unit will be rented for a cumulative monthly amount of $10000 per year - Cost per unit when rented $7000 per year - Fixed costs $1200000 per year for the building, other than the initial investment - Demolition/Clean up $6000000 after-tax - Depreciation is to be straight-line - Assume the project can be financed at 8% (before-tax) using debt - Tax Rate is 30% Develop a pro forma income statement and compute the after-tax operating (NOPAT) cash-flow.If variable costs remain at $7000 per unit; number of units rentable are 792, what should the breakeven rental price be?

Group of answer choices

>$9700

<$9400

$9600-$9700

$9500-$9600

$9400-$9500