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Questions 31-40 are four (4) points each. Your employer, Kent, Uc_is considering an investment in an office building that has the following cash flows: Purchase

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Questions 31-40 are four (4) points each. Your employer, Kent, Uc_is considering an investment in an office building that has the following cash flows: Purchase in Year O................ $-2,750,000 Year 1. 180,000 Year 2 276,000 Year 3. 220,000 Year 4. 239,000 Year 5 250,000, and o sale @ $3,190,000 takes place EOY 5 The company's weighted average cost of capital that they use as their discount rate for such calculations is 8% In the Rubio LLC example above, assume that the company bought the office building using 70% mortgage debt at an interest rate of 4.00% over 240 months. 38. What would be the total cash flows in Year 5, taking into consideration the cash flows, annual debt service, sale price and the balance on the loan at the EOY 5? a. $1,662,985 b. $1,937,607 c. $1,723,196 d. $1.915,172

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