You are provided with the following information about a particular building: * The asking price is R7 500 000. * The buyer will take out a mortgage loan at a rate of 11.5% per annum compounded monthly for 15 years. * The bank requires a maximum loan to value ratio of 75%. * The initial rental is R35 per square metre per month of lettable area. * The building has 6 000 square metres of gross lettable area. * Rentals escalate at 8% per annum. * You estimate that vacancy and bad debts will amount to 5% of PGI per annum. * Operating expense costs amount to R70000 per month and escalate at 10% per annum. * Depreciation is to be calculated at 5% per annum of asking price. * The investor's marginal tax rate is 40%. * If the investor sells the property, it is estimated that the property will escalate in value by 10% per annum. The investor will hold the property for 4 years. * The investor's required rate of return is 15%. * Commission of 5% will be paid to the estate agent that sells the building. You are required to: 1. Calculate the NPV and IRR for this investment assuming: * 75% loan * 100% loan * 80% loan * 0% loan 2. Calculate the market value of the property given each financing option in no 1 above assuming that the overall capitalisation rate (OCR) is 15%