Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Monthly payment - 4 5 2 4 - Purchase Price 8 5 0 , 0 0 0 - Downpayment 1 7 0 , 0 0

Monthly payment -4524- Purchase Price 850,000- Downpayment 170,000- Using some or all of the information shown below, calculate the Net Present Value of the investment property (the
same investment used from question #3, #4 and #5)?
Year 0
Down Payment =$170,000
Year 1
Net Operating Income =$150,000
No Capital Additions
No Interest earned
Year 1-3 Debt Service = Calculated monthly payment with no additional principal payments made
Years 2 and 3 :
Net Operating Income increase by 5% each year
No Capital Additions
No Interest earned
Year 3
Expect to sell the property on 1231?2025 for $956,000
Cost to sell the property expected to be 6% of the sale price
Discount Rate =10%
$266,877
$267,010
$266,759
$266,937
Undiscounted Cashflow
Year 1-95,711
Year 2-103,211
Year 3-111,086
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Handbook Of Mortgage Backed Securities

Authors: Frank Fabozzi

6th Edition

0071460748, 978-0071460743

More Books

Students also viewed these Finance questions