You are purchasing an $11,500,000 industrial property, and considering two financing alternatives. One is to bring together several partners who will provide all equity financing. The other is to borrow 70% of the value, at 7%, for 22 years. The loan would have a six year call. Expected NOI is $1,200,000. a. Is this a favorable leverage situation? b. What is the expected Re if you use the debt? c. If you borrowed more than 70%, would the expected Re be higher or lower than your answer to part b? Why? d. How does the use of leverage impact risk? Be specific. You are purchasing an $11,500,000 industrial property, and considering two financing alternatives. One is to bring together several partners who will provide all equity financing. The other is to borrow 70% of the value, at 7%, for 22 years. The loan would have a six year call. Expected NOI is $1,200,000. a. Is this a favorable leverage situation? b. What is the expected Re if you use the debt? c. If you borrowed more than 70%, would the expected Re be higher or lower than your answer to part b? Why? d. How does the use of leverage impact risk? Be specific