Question
For Questions 20-22 use the following set of cash flows: Initial investment = $1,300,000 Yr 1 : 140,000 Yr 2: 150,000 Yr 3: 155,000 Yr
For Questions 20-22 use the following set of cash flows:
Initial investment = $1,300,000
Yr 1 : 140,000
Yr 2: 150,000
Yr 3: 155,000
Yr 4: 175,000
Yr 5: 190,000
Sale of property occurs at the end of Yr 5 for a price of $1,750,000
For Questions 23 use the facts above, and assume that there is 65% debt financing used for the same investment. Interest is 6.00% (monthly pymts) over 240 months.
23) The amount borrowed on this investment and the amount of equity required are:
a. $845,000 and $455,000 respectively b. $700,000 and $300,000 respectively b. $1,200,000 and $300,000 respectively c. $910,000 and $390,000 respectively
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