(Use excel for all questions if possible and show work for all questions)

1) The NOI is $950,000, the debt service is $650,000 of which $550,000 is interest, the depreciation expense is $250,000 and the income tax rate is 35%.

(a) What is the before- tax cash flow to the equity investor (EBTCF) if there are no capital improvement expenditures or reversion items this period?

(b)What is the after-tax cash flow to the equity investor?

2) A commercial property that was valued at $625,000 is considered to have 35% of its total value attributable to land. What is the annual depreciation expense chargeable against taxable income?