Given the following information, please calculate after tax cash flow for year 1. Assuming a sales price of $1,100,000, please calculate the after tax cash flow from the sale (dont forget the depreciation recapture.) Finally, calculate the after tax IRR for the investment.

Purchase Price: $900,000

Loan: $750,000, 5%, 25 years (annual payments)

Year 1 NOI: $100,000

Year 2 ATCF: $33,000

Year 3 ATCF: $34,000

Use an 85/15 ratio for depreciation. 39 year, straight line.

35% tax rate on income, 15% on long term capital gains, 25% depreciation recapture.

1. annual loan payment 53,214.34

2. annual depreciation expense= 19,615.38

3. after tax cash flow (ATCF) for year= 31776.04

5. What is the IRR of the investment?