Given the following information, calculate after-tax cash flow for year 1.  Assuming a sales price of $1,100,000, calculate the after-tax cash flow from the sale (don’t 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.

What is the after-tax cash flow from the sale at the end of year 1? $31,776.04

What is the after-tax cash flow from the sale at the end of year 3?