You are an employee of University Consultants, Limited, and have been given the following assignment. You are to present an investment analysis of a small retail income$-$producing property for sale to a potential investor. The asking price for the property is $$1,410,000$; rents are estimated at $$180,480$ during the first year and are expected to

grow at $3\mathrm{.}5$ percent per year thereafter. Vacancies and collection losses are expected to be $15$ percent of rents. Operating expenses will be $35$ percent of effective gross income.

A fully amortizing $70$ percent loan can be obtained at $5$ percent interest for $30$ years $($total annual payments will be monthly payments $12).$ The property is expected to appreciate in value at $2$ percent per year and is expected to be owned for five years and then sold.

Required:

a$.$ What is the first$-$year debt coverage ratio?

b$.$ What is the terminal capitalization rate?

c$.$ What is the investor's expected before$-$tax internal rate of return on equity

invested $($BTIRR$)?$

d$.$ What is the NPV using a $11$ percent discount rate?

e$.$ What is the profitability index using a discount rate of $11$ percent?

Complete this question by entering your answers in the tabs below.

What is the first$-$year debt coverage ratio?

Note: Do not round intermediate calculations. Round your final answer to $2$ decimal places.