You are looking to acquire a vacant property to build six retail units averaging $1,600$ square feet per unit. Your contractor tells you that you can expect to spend roughly $$130/$SF in hard costs for this project. Your experience in past projects reveals your soft costs associated with such projects are roughly $20\%$ of your total hard costs.

After consulting a local retail broker, you determine you will be able to achieve base rents of $$18\mathrm{.}50$ in annual rents$/$SF and that the average vacancy in this market is $7\mathrm{.}0\%.$ You further assume your operating expenses will equal $$3\mathrm{.}00/$SF$.$

A bank is willing to finance this acquisition at a $6\mathrm{.}5\%$ annual interest rate $($paid monthly$)$ amortized over $30$ years so long as you can maintain a minimum debt service coverage of $1\mathrm{.}20.$

If the bank is willing to finance $75\%$ of the total project costs, how much can you afford to spend acquiring the land in order to keep the project financially feasible?

A$.$ $$249,600$

B$.$ $$1,248,000$

C$.$ $$500,075$

D$.$ $$1,997,675$

Using the same assumptions from the previous question, determine the investment's projected levered IRR by adding the following assumptions.

Annual Rent Growth: $3\%$

Annual Expense Growth: $2\mathrm{.}5\%$

Holding Period: $5$ years

Exit Cap Rate: $6\%$

Sales Expense: $3\%$ of the sale price

The sale price is determined on the forward $12-$month NOI

Hint: Year $1$ potential gross rent will be $$177,600$

A$.23\mathrm{.}8\%$

B$.24\mathrm{.}6\%$

C$.21\mathrm{.}0\%$

D$.22\mathrm{.}9\%$

What is the project's expected equity multiple if you decide to sell at the end of year $3$ instead?

A$.1\mathrm{.}9$x

B$.2\mathrm{.}4$x

C$.2\mathrm{.}1$x

D$.2\mathrm{.}7$x

Assume that the value associated with the building $($the improvements$)$ on the previous deal equals $$1,500,000.$ What is your annual depreciation expense?

A$.$ $$72,643$

B$.$ $$51,222$

C$.$ $$54,545$

D$.$ $$38,462$

Assuming an ordinary income tax rate of $35\%$ and no capital expenditures, how much income tax would you owe on this deal in year $1?$

A$.$ $$6,198$

B$.$ $$4,176$

C$.$ $$2,229$

D$.$ $$354$

E$.$ $$8,299$

Now assume again you are going to sell the project at the end of year $5.$ Based on a Depreciation Recapture Tax Rate of $25\%$ and a Capital Gains Tax Rate of $15\%,$ what is the expected After$-$Tax Internal Rate of Return on this deal? Assume no capital expenditures were incurred during the holding period.

A$.21\mathrm{.}6\%$

B$.22\mathrm{.}9\%$

C$.20\mathrm{.}8\%$

D$.19\mathrm{.}7\%$

E$.19\mathrm{.}1\%$

Please provide an excel sheet with the formulas. If you cannot answer all of these, at least answer the first one, Thanks.