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The NO/ for a small income property is expected to be $156,000 for the first year. Financing will be based on a 1:2 DCR applied

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The NO/ for a small income property is expected to be $156,000 for the first year. Financing will be based on a 1:2 DCR applied to the first year NOI, wit have a 10 percent inferest rate, and wilt be amortized over 20 years with monthly payments. The NOF wit increase 3 percent per year after the first year. The investor expects to hold the property for five years. The resale price is estimated by applying a 9 percent terminal capitalization rate to the sixth-year NOI Investors require a 16 percent rate of return on equity (equity yield rate) for this type of property. Required: a. What is the present value of the equity interest in the property? b. What is the total present value of the property (mortgage and equity interests)? c. Based on your answer to part (b), what is the implied overall capitalization rate? Complete this question by entering your answers in the tabs below. What is the present value of the equity interest in the property? (Do not round intermediate calculations. Round your final answer to the nearest dollar amount.) Required: a. What is the present value of the equity interest in the property? b. What is the total present value of the property (mortgage and equity interests)? c. Based on your answer to part (b), what is the implied overall capitalization rate? Complete this question by entering your answers in the tabs below. What is the total present value of the property (mortgage and equity interests)? (Do not round intermediate calculations. Round your final answer to the nearest dollar amount.) Required: a. What is the present value of the equity interest in the property? b. What is the total present value of the property (mortgage and equity interests)? c. Based on your answer to part (b), what is the implied overall capitalization rate? Complete this question by entering your answers in the tabs below. Based on your answer to part (b), what is the implied overall capitalization rate? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

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