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Help me with these problems by using excel spreadsheet??? An institutional investor is comparing management fees for two competing real estate investment funds. Both funds
Help me with these problems by using excel spreadsheet???
An institutional investor is comparing management fees for two competing real estate investment funds. Both funds expect to begin operations and are accepting capital commitments. When the funds begin acquiring properties, capital call will be made to investors for capital contributions during the investment period. Fund A will charge a fee of 45 BP on capital committed and 60 BP on capital invested after the investment period ends. Fund B will charge a fee of 50 BP on capital committed and 55 BP on capital invested after the investment period ends. Both funds expect to have $500,000,000 in capital commitments and project a five-year cycle for startup and acquisitions. Capital flows are expected as follows: Fund A Contributed Capital $200,000,000 $300,000,000 Capital Returned Invested Capital $200,000,000 $500,000,000 $500,000,000 $400,000,000 $350,000,000 Year 0 0 0 $100,000,000 $ 50,000,000 2 4 Fund B Capital Ceturned Contributed Capital $300,000,000 $200,000,000 Invested Capital $300,000,000 $500,000,000 $500,000,000 $450,000,000 $350,000,000 Year 0 0 0 $ 50,000,000 $100,000,000 2 4 a. What will total fees be for Fund (A)? For Fund (B)? b. What may the pattern of capital commitments/contributions indicate about the expectations of the respective fund managersStep by Step Solution
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