Answer the questions and show every calculation in detail step by step. PREFERRED EQUITY Assume two people

Answer the questions and show every calculation in detail step by step.

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PREFERRED EQUITY Assume two people buy a property for $2,000,000 that generates cash flow of $150,000. The partners agree that A (Operator) will contribute 10% and B (Money) will contribute 90%. Both parties will receive 8% on their investment and then split the remaining cash flow 20%/80%, respectively, after receiving their preferred returns. Assume any unpaid preferred return earns interest at 8%. Assume the property has NOI of $150,000 in year one and $200,000 in year two. 1. What is the cash flow to each party each year? 2. What is the Return on Investment for each after two years? PREFERRED EQUITY Assume two people buy a property for $2,000,000 that generates cash flow of $150,000. The partners agree that A (Operator) will contribute 10% and B (Money) will contribute 90%. Both parties will receive 8% on their investment and then split the remaining cash flow 20%/80%, respectively, after receiving their preferred returns. Assume any unpaid preferred return earns interest at 8%. Assume the property has NOI of $150,000 in year one and $200,000 in year two. 1. What is the cash flow to each party each year? 2. What is the Return on Investment for each after two years?

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PREFERRED EQUITY SCENARIO ANALYSIS To calculate the cash flow to each party and the Return on Invest... View the full answer