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Hi I have no idea where to start, we are supposed to use the excel template to answer the questions thank you Financial Feasibility 1.

Hi I have no idea where to start, we are supposed to use the excel template to answer the questions thank you

image text in transcribed Financial Feasibility 1. You are analyzing an office building to determine if it makes financial sense to build. Market rents are $11 per square foot. The building and site improvements cost $145; the investor requires a 6 percent return. If market vacancy and credit loss is 5 percent and expenses are 15 percent of EGI, do you move forward with the project? A yes or no answer is insufficient, you have to back into the PGI. 2. If market rent is $10 per square foot and an investor requires a 5 percent return how much can you spend per square foot to construct a new office building if operating expenses are 5 percent and vacancy and credit loss is 1 percent? Solving for i 3. Suppose a loan payment (principle and interest) is $500 per month and the remaining term is 15 years (180 payments) and the present value of the mortgage is $59,251.76, what is the interest rate? Mortgage Valuation 4. A mortgage paying 6 percent interest has a present value of $200,194.94 with monthly payments of $1,200 for the next 360 months. If the interest rates increase to 8 percent, what is the value of the mortgage? If interest rates decrease to 4 percent, what is the value of the mortgage? Remember, in this case you simply need the present value of the anticipated cash flows at the market interest rates. Band of Investment 5. If the equity requirement is 12 percent and a mortgage can be obtained for 25 years at 7 percent. If the loan to value ratio is 70 percent (equity is 30 percent), what is the value of a property that generates $125,000 in net operating income. Loan Amortization - Remaining Balance 6. Suppose you borrow $250,000 at 5 percent for 15 years with monthly payments, how much do you owe at the end of five years. Loan Amortization - Total Interest 7. Suppose you borrow $30,000 at 12 percent for five years. What is the total interest that you will have paid over the life of the loan? Present Value of a Project 8. Consider the following information about a project. What is the NPV. PGI Vacancy Expenses (% of EGI) Growth in PGI 3% Hold period years Terminal cap rate Discount rate Initial cost 10,000 5.0% 10.0% 3.0% 5.0% 9.0% 12.0% 90,0 00 Bonus Question 1. A property sells for $200,000 with seller financing at 3 percent for 30 years with monthly payments. The loan to value ratio (LTV) is 80 percent (purchaser makes a down payment of 20 percent). If market interest rates are 6 percent what is the cash equivalent price of this sale? 1 2 Rents Building Return Vacancy Expenses $ $ 11.00 145.00 6% 5% 15% Rents Building Return Vacancy Expenses Required return PGI Vacancy EGI PGI Vacancy EGI Expenses NOI Expenses NOI Yes Construction allowance 3 10 5% 1% 5% 4 Payment Term Loan Amount $ 500 15 $ 59,251.76 PV i Payment Term i At At 8.00% 4.00% 5 $ $ 200,195 6.00% 1,200 30 Equity Term Debt i LTV NOI $ 12% 25 7.0% 70% 125,000 Interest Equity Debt Total return Value % * * Weighting 6 7 Loan i Term 250000 5.00% 15 Loan i Term Step 1 find payment Payment Find Payment Payment Step 2 find value at yr 5 Find total paid 5 Payof Interest paid 30000 0.12 5 8 PGI Vacancy Expenses (% of EGI) Growth in PGI 3% Hold period years Terminal cap rate Discount rate Initial cost 10000 5.0% 10.0% 3.0% 5.0% 9.0% 12.0% 90,000 0 Initial Cost PGI Vacancy EGI Expenses NOI Sales Price Cash flows NPV @ 12% 1 Bonus 2 3 4 5 6 Value Term LTV Loan i market i first find payment Now PV of PMT + Down payment $ $ $ 200,000 30 80.0% 160,000 3.0% 6.0%

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