Evaluate the purchase of an existing 950 unit apartment complex for $12500000, 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 building's life. Rentals are estimated at 855 units per year. Each unit will be rented for a cumulative monthly amount of $16000 per year. Cost per unit when rented $8000 per year. Fixed costs $3000000 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%. Having studied market downturns, you estimate that a worst case scenario would entail rental of about 75% of the apartments at 75% of the normal rent.Also estimate a maximum value for the project assuming the building can maintain a rental rate of 95%, at a 10% premium over the currently planned rent. Assume before tax required return at 8%. What is the NPV of the worst case scenario?

Multiple choice question, possible answers are:

>-$10600000

<-$13600000

-$12600000 to -$11600000

-$13600000 to -$12600000

-$11600000 to -$10600000