Question
NEED HELP WITH #15 ONLY 14 Suppose you buy the property at the asking price of $7,000,000 and own it for exactly 1 year. You
NEED HELP WITH #15 ONLY
14 Suppose you buy the property at the asking price of $7,000,000 and own it for exactly 1 year. You make the down-payment in part (9). You collect the NOI in part (3). You make the annual mortgage payment in part (10). In two years, the NOI is expected to be the same. You sell the property at the end of year 1, at a cap rate of 50 basis points below the cap rate in part (11) and you pay off the loan balance when you sell. Compute the IRR on this investment. Write your answer in percent, but do not include the % sign.
IRR FOR #14 is 35.12
15. What should be the cap gains tax rate so that the IRR in question 14 is 30%? Suppose there is no depreciation, and no deductions are possible. Write your answer in percent, but do not include the % sign.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started