If you recall (from Problem Set 2), Mr. Arnold Benedict is thinking of buying an apartment complex that is offered for sale by the firm of Getabinder and Flee. The price, $2.25 million, equals the property's market value. Further, Mr. Benedict can obtain a $1,500,000 loan with terms of interest at 8.5 percent per annum, level annual payments, to amortize the loan over 20 years. There are no points or loan amortization fees anticipated. 2) He has obtained the following estimates from an investment analyst for the BTCF and ATCF (before and after-tax cash flows) for the five year holding period (as well as the reconstructed income statement for period 0). In addition, he has the BTER and ATER (before and after-tax equity reversion) for the property assuming it is sold at the end of the 5 year holding period. This information is shown below (this is taken from the solution for question #2 from Problem Set 2): Year 0 Year 1 Year 2 Year 3 Year4 Year 5 309,600 316,586 323,689 330,972 338,419 346,033 21,672 22,160 22,658 23,168 23,689 24,222 8,383 295,428 302,075 308,872 315,822 322,928 330,194 PGI - Vacancy + Misc Income 7,669 7,841 8,018 8,198 EGI -Operating Exp 45,14846,164 47203 4 50,461 -Property Taxes 76,374 76,374 76,374 80,04880,048 80,048 158.506 158,506 8.506158,506 158,506 48,26549,351 14.771 15104 1544 15,791 M. Fee 15,79116,14616,510 NoI 159,135 164,433 169,851 171,718 177,383 183,175 Debt Service BTCF 5,92711,345 13,212 18,877 164,433 169,851 171.718 177.383 183,175 127,500 124,864122,005 118,902115,536 62,730 65,448 65,448 65,448 62,730 NOI Interest - P. Penalty Discount Exp Passive Income Pass Through Other Passive (25,797) (20,461) (15,735)(6,967) 4909 25,000 25,000 25,000 25,000 25,000