Question
you are considering purchase an office building for 2,500,000 you expect the potential gross income in the first year to be 450,000 they can see
you are considering purchase an office building for 2,500,000 you expect the potential gross income in the first year to be 450,000 they can see in collection losses to be 9% of PGI in operating expenses in capital expenditures to be 42% of affective gross income you will finance the acquisition with 25% equity and 75% debt the annual interest rate on the debt financing will be 5.5% payment will be made monthly based on 25 years amortization schedule what is the expected debt coverage ratio in year one of operations and part b What is the debt yield ratio show calculations
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