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 $$1,380,000$; rents are estimated at $$176,640$ during the first year and are expected to grow at $25$ percent per year thereafter. Vacancies and collection losses are expected to be $10$ percent of rents. Operating expenses will be $35$ percent of effective gross income. A fully amortizing $70$ percent loan can be obtained at $7$ percent interest for $30$ years $($total annual payments will be monthly payments $12).$ The property is expected to appreciate in value at $3$ 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$.($Answer is a percent rounded to $2$ decimal places$)$ What is the terminal capitalization rate?

c$.($enter ur answer as a percent rounded to $2$ decimals$)$ What is the investor's expected before$-$tax internal rate of return on equity invested $($BTIRR$)?$

d$.($round final answer to the nearest dollar amount$)$ What is the NPV using a $10$ percent discount rate?

e$.($round final answer to $2$ decimal palces$)$ What is the profitability index using a $10$ percent discount rate?

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

Required $A$

Required B

Required C

What is the terminal capitalization rate? $($Do not round intermediate calculations. Enter your answer as a percent rounded to $2$ decimal places.$)$

Terminal capitalization rate