QUESTION #1

Given the following information regarding an income producing property, determine the leveraged internal rate of return (IRR). Expected Holding Period: 5 years; 1st year Expected NOI: $89,100; 2nd year Expected NOI: $91,773; 3rd year Expected NOI: $94,526; 4th year Expected NOI: $97,362; 5th year Expected NOI: $100,283; Debt Service in each of the next five years: $58,444; Current Market Value: $885,000; Required equity investment: $221,250;Net Sale Proceeds of Property at end of year 5: $974,700;Remaining Mortgage Balance at end of year 5: $631,026

QUESTION # 2

Given the following information regarding an income producing property, determine the after tax net present value (NPV). Expected Holding Period: 5 years; 1st year Expected BTCF: $30,656; 2nd year Expected BTCF: $33,329;3rdyearExpectedBTCF:$36,082;4th year

ExpectedBTCF :$38,918; 5th year Expected BTCF:$41,839; 1st year Expected Tax Liability: $7,645;2nd year Expected Tax Liability: $8,658;3rd year Expected Tax Liability: $9,708; 4th year Expected Tax Liability: $10,798; 5th year Expected Tax Liability: $6,951; Estimated Before Tax Equity Reversion at end of year 5: $343,674; Expected Taxes Due on Sale at end of year 5: $32,032; Required equity investment: $241,163; After Tax Opportunity Cost: 11.2%.