Venture Capital Limited has formed a private real estate syndication to acquire and operate the Tower Office Building. Venture will act as the general partner and will have 35 individual limited partners. The venture to be undertaken and relevant cost and financial data are summarized as follows:

Cost breakdown
Land	$ 1,000,000
Improvements	9,000,000	(capitalized)
Points	100,000	(amortized over loan term)
Subtotal	$10,100,000
Organization fee	100,000	(amortized over 5 years)
Syndication expenses	100,000	(capitalized)
Total funding required	$10,300,000

Financing
Loan amount	$ 8,000,000
Interest rate	4.75%
Term	25	years (monthly payments)
Points	$100,000

Partnership facts and equity requirements

Organization: December, year 1

Number of partners: 1 general partner and 35 limited partners

Equity capital contribution: General partner, 10%; limited partners, 90%

Cash assessments: None

Cash distributions from operations: General partner, 10%; limited partners, 90%

Taxable income and losses from operations: General partner, 10%; limited partners, 90%

Allocation of gain or loss from sale: General partner, 15%; limited partners, 85%

Cash distribution at sale: Based on capital account balances

Operating and tax projections
Potential gross income (year 2)	$1,300,000
Vacancy and collection loss	10% of potential gross income
Operating expenses (year 2)	35% of effective gross income
Depreciation method	Straight-line, 39 years
Projected growth in income	2% per year
Projected resale price after 5 years	$12,750,000
Limited partners tax rate	24%
General partners tax rate	24%
Selling expenses	5%

Required:

a. Determine an estimated return (ATIRR_e) for a limited partner. (Hint: Consider all 35 limited partners as a single investor.) b. Determine an estimated return (ATIRR_e) for the general partner.