Q2 For the following project: 2-year investment The first NOE is 10 at t=1, and NOI changes by 2%/yr until t=3. The cap rafris 9% (going-in) at t=0 and increases by 50 bps/yr to 10% (going-out) at t=2. Capital Expenditures are 10% of NOI. The investment is levered with a two-year interest-only loan at a 5% interest rate with the initial LTV of 0.5. A. Construct the cash flow proforma B. Estimate the percentage-point contribution to the equity IRR of (1) the baseline return under no NOI growth or no cap rate change, (2) NOI growth, (3) cap rate changes, (4) interaction of 2 and 3, and (5) leverage. Furthermore, (6) estimate the equity IRR by adding (1), (2), (3), (4), and (5). Of course, you could calculate equity IRRs under alternative assumptions, but you can answer these questions without computing an IRR. Q2 For the following project: 2-year investment The first NOE is 10 at t=1, and NOI changes by 2%/yr until t=3. The cap rafris 9% (going-in) at t=0 and increases by 50 bps/yr to 10% (going-out) at t=2. Capital Expenditures are 10% of NOI. The investment is levered with a two-year interest-only loan at a 5% interest rate with the initial LTV of 0.5. A. Construct the cash flow proforma B. Estimate the percentage-point contribution to the equity IRR of (1) the baseline return under no NOI growth or no cap rate change, (2) NOI growth, (3) cap rate changes, (4) interaction of 2 and 3, and (5) leverage. Furthermore, (6) estimate the equity IRR by adding (1), (2), (3), (4), and (5). Of course, you could calculate equity IRRs under alternative assumptions, but you can answer these questions without computing an IRR