Now perform a comparable analysis for the residential lease property: Rental homes Annual rental income Estimated resale value Less: Annual operating expenses Less: Annual depreciation expense Less: Annual interest payments (4%) Less: Taxes (25%) Less: Capital gains tax (15%) Net profit Interest factor (8%) PV of Cash flow Total PV of Cash flows S S $ Year 1 $132,415 0 26,483 8,273 11,700 21,490 0 0.9259 3 S Year 2 $135,063 0 27,013 8,273 11,115 22,166 0 0.8573 5 Year 3 $137,765 0 27,553 8,273 10,530 SUND 22,852 1902 0 Tanelon 0.7938 5 Year 4 $140,520 689,000 28,104 8,273 9,945 23,550 0.7350 The net discounted return expected from an investment in the rental homes tract-after deducting the cost of the investment-is Fam 12.0 2