You are an investor and have the opportunity to purchase a commercial building in a productive business environment. The asking price is $8,000,000 and you are able to secure financing in the form of a 20 year fully amortizing fixed payment mortgage for 75% of the asking price. This mortgage has monthly payments and monthly compounding periods with an annual interest rate of 8% with the entire balance due in 5 years or at the time of sale, whichever occurs sooner. The building contains 180,000 square feet of leasable space and is situated on a 10 Acre lot. Rent in the area for comparable commercial space is $7.50 per square foot. Land prices in the area for lots in the 10 Acre range are $100,000 per acre. In addition, the following information and assumptions are available to aid your analysis:

Vacancy and Collection Loss (% of PGI) 8%

Year 1 Operating Expense Ratio (% of EGI) 37%

Annual Inflation of Rents 3%

Annual Inflation of Expenses 3%

Commercial Depreciation Period 39 years

Your Income Tax Rate 38%

Your Capital Gains Tax Rate 20%

Terminal Cap Rate(Applied to 5th year's NOI at sale) 10%

Selling Expenses as a percent of Gross Sales Price 6%

Your After Tax Required Rate of Return 14%

Planned Holding Period 4 years

1) Complete a Pro Forma Cash Flow Statement based on the information given (In excel) Should you invest in this property under the terms and assumptions outlined? Why or why not?