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Given the following information regarding an income producing property, determine the after-tax net present value (NPV): expected holding period: five years 1st year expected BTCF:
Given the following information regarding an income producing property, determine the after-tax net present value (NPV):
- expected holding period: five years
- 1st year expected BTCF: $30,656
- 2nd year expected BTCF: $33,329
- 3rd year expected BTCF: $36,082
- 4th year expected BTCF: $38,918
- 5th year expected BTCF: $41,839
- 1st year expected tax liability: $7,645
- 2nd year expected tax liability: $8,658
- 3rd year expected tax liability: $9,708
- 4th year expected tax liability: $10,798
- 5th year expected tax liability: $6,951
- estimated before tax equity reversion at end of year 5: $343,674
- expected taxes due on sale at end of year 5: $32,032
- required equity investment: $214,583; discount rate: 18% (without tax)
- Tax rate on income from comparable risk investment is 30%.
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