Using the Threshold Rate of 15.20% compute the Net Present Value (NPV) for this Investment:

In conclusion, Project 1175 GERARD AVENUE has this standing in our Capital Budgeting system:

Initial Investment = ______________________

Its Time Line ends with a Sale of the property at the end of the _______ year.

At a Discount Rate of ______% it has a NPV = ______________.

This means that it MUST BE DESCRIBED AS AN ACCEPTABLE or UNACCEPTABLE PROJECT for the Threshold Rate of 14%.

The NPV value indicates that, after the _____ year, the project has earned an attractive rate of return of over _____% and still has some retained value.

PROPOSAI 5 GERARD Time Period cASH FLOW COMMENT end of vear PRESENT TIME 0 ($12,000,000) INITIAL INVESTMENT IN THE APARTMENT TOWER 2 3 4 5 6 7 8 1,000,000 1,400,000 1,800,000 2,100,000 2,300,000 2,400,000 3,000,000 OUT-OF-POCKET NEGATIVE CASH FLO POSITIVE CASH FLOW FROM RENTAL REVENUE OPERATING COSTS- DEBT SERVICE POSITIVE CASH FLOW FROM RENTAL REVENUE OPERATING COSTS- DEBT SERVICE POSITIVE CASH FLOW FROM RENTAL REVENUE OPERATING COSTS- DEBT SERVICE POSITIVE CASH FLOW FROM RENTAL REVENUE OPERATING COSTS- DEBT SERVICE POSITIVE CASH FLOW FROM RENTAL REVENUE OPERATING COSTS- DEBT SERVICE POSITIVE CASH FLOW FROM RENTAL REVENUE OPERATING COSTS- DEBT SERVICE POSITIVE CASH FLOW FROM RENTAL REVENUE OPERATING COSTS- DEBT SERVICE 16,000,00o THE PROJECT IS SOLD AFTER NET INCOME, RENOVATION COSTS, CLOSING COSTS, & DEBT PAYOF Using a threshold discount rate of INSERT A NUMBER HERE Rate % for the Threshold INSERT NUMBERS HERE IN ALL THE BLANK SPACES DISCOUNT FACTOR CALCULATED Time Period (end of year) PRESENT CASH FLOW(Threshold Rate) from PRESENT VALUE FOR VALUE TABLEEACH YEAR 0 $12,000,000 1,000,000 1,400,000 1,800,000 2,100,000 2,300,000 2,400,000 3,000,000 16,000,000 1.000 2 3 4 5 6 7 8