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Given the following, what is the after-tax IRR? Purchase Price $9,000,000 Mortgage $6,000,000 Interest Rate 7.5% Amortization Term 20 Years Payment Period Monthly Land Cost
Given the following, what is the after-tax IRR?
| Purchase Price | $9,000,000 |
| Mortgage | $6,000,000 |
| Interest Rate | 7.5% |
| Amortization Term | 20 Years |
| Payment Period | Monthly |
| Land Cost 15.0% | $1,350,000 |
| Improvement Cost | $7,650,000 |
| Annual Depreciation | $196,154 |
| IRS Mid-Month Convention | 0.96 |
| Tax Rate | 35.0% |
| Capital Gains Tax Rate | 15.0% | |
| Total Capital Improvements | $0 | |
| Depreciation Recapture Tax | 25.0% | |
| Sale Price (Property Reversion) | $9,360,805 | |
| Costs of Sale | 0.0% | |
| Holding Period | 5 Years | |
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
| NOI | $901,375 | $900,681 | $899,962 | $943,700 | $961,855 |
| Interest | $445,436 | $434,987 | $423,727 | $411,593 | $398,517 |
| Depreciation | $187,981 | $196,154 | $196,154 | $196,154 | $196,154 |
| Taxable Income | $267,958 | $269,540 | $280,081 | $335,953 | $367,184 |
| Tax Rate | |||||
| Taxes | |||||
| NOI | |||||
| Debt Service | |||||
| PTCF | |||||
| Taxes | |||||
| ATCF |
A) 12.22%
B) 16.70%
C) 12.51%
D) 12.09%
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