Peggy Richards is considering purchasing the vacant lot adjacent to her current restaurant location. Peggy is convinced that by purchasing and paving it to make a parking lot, the additional NOI she would earn is $$61,500$ per year. The total project is estimated to cost $$250,000.$ Peggy can borrow money at $8\%$ interest. If she finances the purchase with $100\%$ equity, she will earn a $24\mathrm{.}6\%$ return on her funds $($if her projections are correct$).$ Peggy thinks she can do better. Help her calculate the various returns on her money she could achieve with different debt$/$equity purchase strategies, and then answer the questions she has about her project.

$\backslash$table$[[$Financing$,\backslash$table$[[$Project Cost$],[250,000]],$Payment or Retum,$\%,$Net Operating Income,Debt Coverage Ratio$],[,,61,500],[$Debt$,50\%,,$Interest payment,$8\mathrm{.}00,,],[$Equity$,50\%,,$ROI,,,$],[,250,000,,,61,500,],[$Debt$,60\%,,$Interest payment,$8\mathrm{.}00,,],[$Equity$,40\%,,$ROI,,,$],[,250,000,,,61,500,],[$Debt$,70\%,,$Interest payment,$8\mathrm{.}00,,],[$Equity$,30\%,,$ROI,,,$],[,250,000,,,61,500,],[$Debt$,80\%,,$Interest payment,$8\mathrm{.}00,4,],[$Equity$,20\%,,$ROI,,,$],[$Total$,100\%,250,000,$ROI,$24\mathrm{.}60,61,500,]]$

a$.$ What would be Peggy's rate of return on her own investment if she borrowed $50\%$ of the money required for the lot's purchase and paving? What would be her debt coverage ratio?

b$.$ What would be Peggy's rate of return on her own investment if she borrowed $60\%$ of the money required for the lot's purchase and paving? What would be her debt coverage ratio?

c$.$ What would be Peggy's rate of return on her own investment if she borrowed $70\%$ of the money required for the lot's purchase and paving? What would be her debt coverage ratio?

d$.$ What would be Peggy's rate of return on her own investment if she borrowed $80\%$ of the money required for the lot's purchase and paving? What would be her debt coveraqe ratio?