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Suppose that you are considering an investment in an apartment builc information provided below to answer the questions that follow: Type of Property: Apartment building

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Suppose that you are considering an investment in an apartment builc information provided below to answer the questions that follow: Type of Property: Apartment building Number of Units: 30 Average Rent (Year 1): $1,500 per unit per month Annual Growth in Average Rent: 5% Vacancy and Collection Losses: 5% of Potential Gross Income Other Income (Year 1): $50 per unit per month Annual Growth in Other Income: 3% Operating Expenses: 35% of Effective Gross Income Capital Expenditures: 4% of Effective Gross Income Selling Expenses: 5% of Future Selling Price Going-Out Cap Rate: 6.5% Expected Purchase Price: $5.25 million Loan Terms: Loan Amount: 85% of Purchase Price Interest Rate: 4.5% per year with monthly payments and monthly comp Amortization Term: 30 years What is the NOI in year 1? Your Answer: Answer Question 2 ( 1 point) What is the monthly payment (Round your answer to two decimal places)? Your Answer: Answer Question 3 ( 1 point) What is the annual debt service in year 1 (Round your answer to two decimal places) ? Your Answer: Answer Question 4 ( 1 point) What is the Before-Tax Cash Flow(BTCF) in year 1 (Round your answer to two decimal places)? Your Answer: Answer Question 5 (1 point) What is the annual debt service in year 2 (Round your answer to two decimal places)? Your Answer: Answer Question 6 (1 point) What is the Before-Tax Cash Flow (BTCF) in year 2 (Round your answer to two decimal places)? Your Answer: Answer What is the remaining mortgage balance at the end of year five (Round your answer to two decimal places)? Your Answer: Answer Question 8 ( 1 point) If NOI in year 6 is $412,115.62. What is the Before-Tax Equity Reversion (BTER) at the end of year 5 (Round your answer to two decimal places)? Your Answer: Answer Question 9 (1 point) Calculate the initial equity investment (Round your answer to two decimai places). Your Answer: Answer What is the internal rate of return of the before-tax levered cash flows if you assume a five-year holding period? (Round your answer to two decimal places) Initial equity investment: (You calculated in question 9) BTCF in year 1: (You calculated this in question 4) BTCF in year 2: (You calculated this in question 6) BTCF in year 3:85,324.02 BTCF in year 4: 102,923.75 BTCF in year 5:121,396.47 BTER: (You calculated in question 8) Your

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