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Hi, can anybody help answer these 3 questions pertaining to the spreadsheet below: E) Lets suppose that you expect to lose a tenant in year
Hi, can anybody help answer these 3 questions pertaining to the spreadsheet below:
E) Lets suppose that you expect to lose a tenant in year 3, which lowers the NOI in years 3, 4 and 5 by $80,000 in each year. What is the new IRR for both scenarios?
F) Explain, in a few sentences, the outcome of E).
G) What would happen to the Going-Out Cap Rate in this situation? Does it stay the same, does it go up, or down? Explain.
nario with a Mortgage: Year 3 NOI: 4 DS: 5 After Tax Cash Flows: $200,000.00 $240,000.00 $245,000.00 $250,000.00$260,000.00 125,000.00 $125,000.00 $125,000.00 $125,000.00 $125,000.00 1,400,000.00After Tax Equity Reversion: Profit tor the Equity Investor 7 Total Cash Flows: 8 $1,250,000.00 $75,000.00 $115,000.00 $120,000.00 $125,000.00 1,535,000.00 10.83% 10 12 Scenario without a Mortgage: Year: IS NOI: b DS: $200,000.00 $240,000.00 $245,000.00 $250,000.00 $260,000.00 $0.00 $0.00 $0.00 50.00 S0.00 After Tax Cash Flows: 2,900,000.00Atter Tax Equity Reversion: Protit tor the Equity Investor Total Cash Flows: $2,800,000.00 $200,000.00 $240,000.00 $245,000.00 $250,000.00 $3,160,000.00 20 IRR 9.05% 23 24Step by Step Solution
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