Purchase price $800,000 LTV 75% Term & Am 15 years Interest rate 4% Closing costs $12,000...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Purchase price $800,000 LTV 75% Term & Am 15 years Interest rate 4% Closing costs $12,000 Holding period 6 years Annual income taxes (below) Marginal tax rate 30% (aka ordinary inc tax) Taxes due on sale $200,000 Discount rate (before tax) 15% Selling expenses 3% Exit cap rate 5% Operations YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 CAPEX $ 33,000 $ 38,000 $41,000 $47,000 $51,000 $ 56,000 $61,000 $(5,000) $ (6,000) $(7,000) $ (8,000) $(9,000) $ (10,000). PBTCF Income taxes on annual operations $28,000 $32,000 $34,000 $ 39,000 $42,000 $46,000 $ (5,000) $ (6,000) $ (7,000) $ (8,000) $ (9,000) $ (10,000) What is the before tax IRR for this investment? Purchase price $800,000 LTV 75% Term & Am 15 years Interest rate 4% Closing costs $12,000 Holding period 6 years Annual income taxes (below) Marginal tax rate 30% (aka ordinary inc tax) Taxes due on sale $200,000 Discount rate (before tax) 15% Selling expenses 3% Exit cap rate 5% Operations YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 CAPEX $ 33,000 $ 38,000 $41,000 $47,000 $51,000 $ 56,000 $61,000 $(5,000) $ (6,000) $(7,000) $ (8,000) $(9,000) $ (10,000). PBTCF Income taxes on annual operations $28,000 $32,000 $34,000 $ 39,000 $42,000 $46,000 $ (5,000) $ (6,000) $ (7,000) $ (8,000) $ (9,000) $ (10,000) What is the before tax IRR for this investment?
Expert Answer:
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
Students also viewed these finance questions
-
The oath scandal in October led to heated debates on the authority of the President of the Legislative Council and the jurisdiction of the Department for Justice as well as the Chief Executive over...
-
Question: Old MathJax webview Old MathJax webview i need ans of these question but the source is alot Old MathJax webviewOld MathJax webview i need ans of these question but the source is alot these...
-
The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1-6. On December 12, Irene purchased the building where her store is located. She paid...
-
A driver of a car is initially 455 miles from home, traveling toward home on a straight freeway at 70 miles per hour. (a) Write a formula for a linear function f that models the distance between the...
-
(a) Verify the CC equation (16.27). (b) Verify (16.28). (o|\e) = (\\|(1 + , + !?)%) %3D
-
$A B C$ plc is about to launch a new product. Facilities will allow the company to produce up to 20 units per week. The marketing department has estimated that at a price of $\$ 8,000$ no units will...
-
For the following, determine if the given point is a removable singularity, an essential singularity, or a pole (indicate its order). a. \(\frac{1-\cos z}{z^{2}}, \quad z=0\). b. \(\frac{\sin...
-
Rodgers Corporation produces and sells football equipment. On July 1, 2014, Rodgers Corporation issued $65,000,000 of 10-year, 12% bonds at a market (effective) interest rate of 10%, receiving cash...
-
(d) What would your expected pro?t be if the undervaluation is only $0.20 per share instead of $0.50, and everything else unchanged? What is the underpricing percentage new? (5 marks)
-
Refer the following table. Focus Metals Inc. Comparative Balance Sheet Information: November 30 (millions of $) 2020 Cash 16 86 Accounts receivable (net). 386 232 60 53 Inventory Plant and equipment...
-
Air at 1 atm and 17C is flowing over a smooth surface of a 0.4-m- solid rod. The airstream velocity is 7 m/s, and the plate is maintained at a constant surface temperature of 153C. Determine (a) the...
-
1. What is a directed graph? What is an undirected graph? Define adjacent nodes? 2. Discuss algorithms of Breadth First Search (BFS) and Depth First Search (DFS) traversal for a Graph. Explain with...
-
Simon Company's year-end balance sheets follow. At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity...
-
Activity rates and product costs using activity-based cost Idris Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities...
-
1 Explain hashing. What is Extendible Hashing? 2 Explain Rehashing in detail. 3 Explain concepts of fields, records and files. 4 Explain Indexed and Relative/Random File Organization. 5 Brief about...
-
TranscribedText: Accompanying material for the ebook Introduction to Financial Accounting in the 21% Century - Gaber & Porporato, 5" Edition McGrawHill Term Project: Part II Bookkeeping for a small...
-
After learning the course, you divide your portfolio into three equal parts (i.e., equal market value weights), with one part in Treasury bills, one part in a market index, and one part in a mutual...
-
The Adjusted Trial Balance columns of a 10-column work sheet for Webber Co. follow. Complete the work sheet by extending the account balances into the appropriate financial statement columns and by...
-
Ann hires a nanny to watch her two children while she works at a local hospital. She pays the 19-year-old nanny $125 per week for 48 weeks during the current year. a. What is the employer's portion...
-
a. Wilson filed his individual tax return on the original due date, but failed to pay $700 in taxes that were due with the return. If Wilson pays the taxes exactly 2 months late, calculate the amount...
-
Skyler is covered by his company's health insurance plan. The health insurance costs his company $3,500 a year. During the year, Skyler is diagnosed with a serious illness and the health insurance...
-
Imagine that you have \($10,000\) to invest. Use a newspaper, the Internet, or other source to select a mutual fund. Use the same source to fi nd out how much gold you could buy for \($10,000\)....
-
Animation art, hand-painted images from which cartoons used to be made, is a popular collectible.
-
The PBS television program, Antiques Roadshow, has generated enormous interest among viewers to find out the value of the furniture, art, jewelry, and collectibles they own.
Study smarter with the SolutionInn App