- Monthly rents are expected to increase each year as shown below: Expenses - The operating expenses for the first year are shown below: - Management fees are equal to 5.0% of Effective Gross income (EGI). EGI is defined in the financial statement structure provided in Appendix C. - Property taxes are expected to increase to 205,000 for Year 5 onwards. - All other operating expenses (i.e. excluding management fees and property taxes) are expected to increase each year at 2.0% per annum. Other Information - All long-term debt and equity will be issued by the end of Year 0 . All capital expenditures will be made by the end of Year 0. - The tenant deposit amounts for each year are shown below: - Each year, the closing receivables balance is 5.0% of EGI, and the closing payables balance is 5.0% of operating expenses excluding depreciation. - Corporation tax is equal to 20% of income before tax. The business only pays corporation tax if it is making a profit. - The company's weighted average cost of capital (WACC) should be calculated using book values for Year 0 . Assume that the company's WACC is constant each year. - After Year 6 , the free cash flow of the business will grow at the perpetuity growth rate of 2.0% per annum. - Monthly rents are expected to increase each year as shown below: Expenses - The operating expenses for the first year are shown below: - Management fees are equal to 5.0% of Effective Gross income (EGI). EGI is defined in the financial statement structure provided in Appendix C. - Property taxes are expected to increase to 205,000 for Year 5 onwards. - All other operating expenses (i.e. excluding management fees and property taxes) are expected to increase each year at 2.0% per annum. Other Information - All long-term debt and equity will be issued by the end of Year 0 . All capital expenditures will be made by the end of Year 0. - The tenant deposit amounts for each year are shown below: - Each year, the closing receivables balance is 5.0% of EGI, and the closing payables balance is 5.0% of operating expenses excluding depreciation. - Corporation tax is equal to 20% of income before tax. The business only pays corporation tax if it is making a profit. - The company's weighted average cost of capital (WACC) should be calculated using book values for Year 0 . Assume that the company's WACC is constant each year. - After Year 6 , the free cash flow of the business will grow at the perpetuity growth rate of 2.0% per annum