Question 5 Consider a property purchased in year 0, and sold in year 3. In years 1, 2 and 3, NOI is equal to $500,000. In year 2 there is a capital expenditure of $100,000, and in year 3 the property is sold for $5,000,000. The property was bought for $3,000,000 in year 0. $1,000,000 was assessed to be the land value, while $2,000,000 was the structure value. Depreciation is straight line to zero, and takes place over a period of 40 years. The property was purchased with a loan of $1,000,000, with constant amortization of $50,000 a year, and interest rate of 5%. The marginal income tax rate of the equity investor is 30%, and capital gains taxes are 20% (assume the investor will not be able to conduct a 1031 exchange transaction when selling the building, and so will have to pay capital gain taxes at sale). Could you calculate EATCF for this property for years 1, 2 and 3? Question 5 Consider a property purchased in year 0, and sold in year 3. In years 1, 2 and 3, NOI is equal to $500,000. In year 2 there is a capital expenditure of $100,000, and in year 3 the property is sold for $5,000,000. The property was bought for $3,000,000 in year 0. $1,000,000 was assessed to be the land value, while $2,000,000 was the structure value. Depreciation is straight line to zero, and takes place over a period of 40 years. The property was purchased with a loan of $1,000,000, with constant amortization of $50,000 a year, and interest rate of 5%. The marginal income tax rate of the equity investor is 30%, and capital gains taxes are 20% (assume the investor will not be able to conduct a 1031 exchange transaction when selling the building, and so will have to pay capital gain taxes at sale). Could you calculate EATCF for this property for years 1, 2 and 3