Problem 13.) Venture Capital Limited has formed a private equity real estate syndication to acquire and operate the Tower Office Building. Venture will act as the general partner and will have 35 individual limited partners. The venture to be undertaken and relevant cost and financial data are summarized as follows: Partnership facts and equity requirements Organization: December, year 1 Number of partners: 1 general partner and 35 limited partners Equity capital contribution: General partner, 10\%; Limited partners, 90% Cash assessment: None Cash distributions from operations: General partner, 10\%; Limited partners, 90% Taxable income and losses from operations: General partner, 10\%; Limited partners, 90% Allocation of gain or loss from sale: General partner, 15\%; Limited partners, 85% Cash distribution at sale: Based on capital account balances Operating and tax projections Potential gross income (year 2): $1,300,000 Vacancy and collection loss: 10% of potential gross income Operating expenses (year 2): 35% of effective gross income Depreciation method: Straight-line, 39 years Projected growth in income: 2% per year Projected resale price after 5 years: $12,750,000 Ordinary income tax rate: 24% Capital gains tax rate: 15% Selling expense: 5% a. Determine an estimated return (ATIRR) for a limited partner. (Hint: Consider all limited partners as a single investor and the depreciation recapture tax to be the lesser of the ordinary income tax rate or the 25% maximum recapture rate.)