Q1.Ann wants to buy a building with an asking price of $3,000,000 (this is also the value). The annual NOI for the building will be $165,000 in year 1. She wants to get a 30 year, fully amortizing, fixed rate mortgage at an annual rate of 4.35% with monthly compounding and monthly payments. The lender has a minimum debt service coverage ratio requirement of 1.25. The lender also has a maximum LTV threshold of 70%. What is the largest mortgage the lender will give Ann based on both the LTV and DSCR requirements?

A.$132,000
B.$2,209,670.43

C.$2,250,000

D.$2,100,000

Q2.Ann wants to buy an office building which costs $1,000,000. She obtains a 30-year fully amortizing fixed rate mortgage with 80% LTV, an annual interest rate of 4%, with monthly compounding and monthly payments. The mortgage has a 2% prepayment penalty if the borrower prepays in the first 5 years. Suppose Ann makes the required monthly payments for 3 years and prepays after her final monthly payment at the end of 3 years. What is the annualized IRR on Ann's mortgage?

A.0.38%

B.4.60%

C.4.00%

D.5.73%