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PLEASE ANSWER ALL PARTS You are considering the purchase of a small apartment complex. d . Calculate the unlevered internal rate of return of this
PLEASE ANSWER ALL PARTS You are considering the purchase of a small apartment complex. d Calculate the unlevered internal rate of return of this investment, assuming no debt. Should you purchase? Note: Do not round intermediate calculations. Enter your answer as a percentage rounded to decimal places ie should be entered as e Calculate the monthly mortgage payment. What is the total per year? Note: Enter your answers in dollars, rather than in millions of dollars. Do not round intermediate calculations. Round your monthly payment answer to two decimal places and the annual payment answer to nearest whole dollar amount. f Calculate the loan balance at the end of years and Note: The unpaid mortgage balance at any time is equal to the present value of the remaining payments, discounted at the contract rate of interest. Note: Enter your answers in dollars, rather than in millions of dollars. Do not round intermediate calculations and round your final answer to nearest whole dollar amount. g Calculate the amount of principal reduction achieved during each of the four years. Note: Enter your answers in dollars, rather than in millions of dollars. Do not round intermediate calculations and round your final answer to nearest whole dollar amount. h Calculate the total interest paid during each of the four years. Remember Debt Service Principal Interest. Note: Enter your answers in dollars, rather than in millions of dollars. Do not round intermediate calculations and final answer to nearest whole dollar amount. i Calculate the levered required initial equity investment. Note: Enter your answers in dollars, rather than in millions of dollars. Round your "Loan amount" answer to deci j Calculate the beforetax cash flow BTCF for each of the four years. Note: Do not round intermediate calculations and round your final answer to nearest whole dollar amount. k Calculate the beforetax equity reversion BTER from the sale of the property. Note: Do not round intermediate calculations and round your final answer to nearest whole dollar amount. I. Calculate the levered net present value of this investment. Should you purchase? Note: Do not round intermediate calculations and round your final answer to nearest whole dollar amount. Levered net present value m Calculate the levered internal rate of return of this investment. Should you purchase? Note: Do not round intermediate calculations. Enter your answer as a percentage rounded to decimal places ie should be entered as n Calculate, for the first year of operations, the Overall cap rate of return. Cashoncash return. Effective gross income multiplier. Debt coverage ratio. Note: Do not round intermediate calculations. Round your final answers to two decimal places. The following assumptions are made: The purchase price is $ million. Potential gross income for the first year of operations is projected to be $ is expected to increase percent per year. No vacancies are expected. Operating expenses are estimated at percent of effective gross income. Ignore capital expenditures. The market value of the investment is expected to increase to $ at the end of years. Selling expenses will be percent. The holding period is four years. The appropriate unlevered rate of return to discount projected NOrs and the projected NSP is percent. The required levered rate of return is percent. percent of the acquisition price can be borrowed with a year, monthly payment mortgage. The annual interest rate on the mortgage will be percent. Financing costs will equal percent of the loan amount. There are no prepayment penalties. Required: a Calculate net operating income NO for each of the four years. Note: Enter your answers in dollars, rather than in millions of dollars. Do not round intermediate calculations and round your final answer to nearest whole dollar amount. b Calculate the net sale proceeds from the sale of the property. Note: Enter your answers in dollars, rather than in millions of dollars. Do not round intermediate calculations and round your final answer to nearest whole dollar amount. c Calculate the net present value of this investment, assuming no mortgage debt. Should you purchase? Note: Enter your answers in dollars, rather than in millions of dollars. Do not round intermediate calculations and round your final answer to nearest whole dollar amount.
PLEASE ANSWER ALL PARTS You are considering the purchase of a small apartment complex. d Calculate the unlevered internal rate of return of this investment, assuming no debt. Should you purchase?
Note: Do not round intermediate calculations. Enter your answer as a percentage rounded to decimal places ie
should be entered as
e Calculate the monthly mortgage payment. What is the total per year?
Note: Enter your answers in dollars, rather than in millions of dollars. Do not round intermediate calculations. Round your
monthly payment answer to two decimal places and the annual payment answer to nearest whole dollar amount.
f Calculate the loan balance at the end of years and Note: The unpaid mortgage balance at any time is equal to the
present value of the remaining payments, discounted at the contract rate of interest.
Note: Enter your answers in dollars, rather than in millions of dollars. Do not round intermediate calculations and round your
final answer to nearest whole dollar amount.
g Calculate the amount of principal reduction achieved during each of the four years.
Note: Enter your answers in dollars, rather than in millions of dollars. Do not round intermediate calculations and round your
final answer to nearest whole dollar amount. h Calculate the total interest paid during each of the four years. Remember Debt Service Principal Interest.
Note: Enter your answers in dollars, rather than in millions of dollars. Do not round intermediate calculations and
final answer to nearest whole dollar amount.
i Calculate the levered required initial equity investment.
Note: Enter your answers in dollars, rather than in millions of dollars. Round your "Loan amount" answer to deci
j Calculate the beforetax cash flow BTCF for each of the four years.
Note: Do not round intermediate calculations and round your final answer to nearest whole dollar amount.
k Calculate the beforetax equity reversion BTER from the sale of the property.
Note: Do not round intermediate calculations and round your final answer to nearest whole dollar amount.
I. Calculate the levered net present value of this investment. Should you purchase?
Note: Do not round intermediate calculations and round your final answer to nearest whole dollar amount.
Levered net present value m Calculate the levered internal rate of return of this investment. Should you purchase?
Note: Do not round intermediate calculations. Enter your answer as a percentage rounded to decimal places ie
should be entered as
n Calculate, for the first year of operations, the
Overall cap rate of return.
Cashoncash return.
Effective gross income multiplier.
Debt coverage ratio.
Note: Do not round intermediate calculations. Round your final answers to two decimal places.
The following assumptions are made:
The purchase price is $ million.
Potential gross income for the first year of operations is projected to be $
is expected to increase percent per year.
No vacancies are expected.
Operating expenses are estimated at percent of effective gross income. Ignore capital expenditures.
The market value of the investment is expected to increase to $ at the end of years.
Selling expenses will be percent.
The holding period is four years.
The appropriate unlevered rate of return to discount projected NOrs and the projected NSP is percent.
The required levered rate of return is percent.
percent of the acquisition price can be borrowed with a year, monthly payment mortgage.
The annual interest rate on the mortgage will be percent.
Financing costs will equal percent of the loan amount.
There are no prepayment penalties.
Required:
a Calculate net operating income NO for each of the four years.
Note: Enter your answers in dollars, rather than in millions of dollars. Do not round intermediate calculations and round your
final answer to nearest whole dollar amount.
b Calculate the net sale proceeds from the sale of the property.
Note: Enter your answers in dollars, rather than in millions of dollars. Do not round intermediate calculations and round your
final answer to nearest whole dollar amount.
c Calculate the net present value of this investment, assuming no mortgage debt. Should you purchase?
Note: Enter your answers in dollars, rather than in millions of dollars. Do not round intermediate calculations and round your
final answer to nearest whole dollar amount.
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