Key Assumptions Construction cost ($) 2,500,000 Loan ($) 755,000 Loan interest rate 8.0% Loan term (yrs.) 8 Hangar space (sq.ft.) 31,000 Rent ($/sq.ft. per month) 1.75 Rent inflator 2.3% Operating Costs ($/yr.) 155,000 Cost inflator 2.3% Tax rate 21.0% Discount rate 8.0% Depreciation/year ($) 44,000 Start 1 2 3 4 5 19 6 7 TV Cash Flows Rent Income minus: Operating Costs minus: Interest minus: Depreciation = Taxable Income minus: Taxes = Net Income minus: Principal = Net Operating Cash Flow minus: Cash Outlay at Start plus: Depreciation = Total Cash Flows NPV IRR Note: Tax shields are the tax gains from expensing interest and depreciation. The formula is interest or depreciation expense times the tax rate