Rental income $($last year$)$$$60000$

Less: Operating & capital expenses

Power$$2400$

Heat$$1900$

Janitor$$3600$

Water$$3800$

Maintenance$$4900$

Reserve for capital expenditures$$1800$

Management$$6000$

Tax depreciation$$5000$

Mortgage payments$$6300$

NOI$-35860$

Property value using cap rate $=512286$

$.2.$ Prepare a discounted cash flow in Excel using the same figures for year one. For years

$2-6,$ the following will apply:

a$.$ Rental rates will increase by $3\%$ per year.

b$.$ Operating expenses will increase by $2\%$ per year with the exception of power and

heat which will increase by $3\%$ per year. Disregard the reserve for capital

expenditures in your calculations.

c$.$ The terminal cap rate is $6\%.$following will apply:d$.$Operating expenses wil by sc by $2$ per year with the exception of power and heat which will increase by $3\%$ per year. Disregard the reserve for capital expenditures in your calculations.c$.$ The terminal cap rate is $6\%.$