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

2.) What is the IRR of the investment?