1. A developer puts in 5% equity and a fund puts in 95% of the equity for a development deal. Cash flow is to be distributed with the following order of priorities (e.g., "the waterfall"):
   • Preferred return is 10% pro rata to both parties.
   • The promote is 20% to the developer then the balance of proceeds pro rata.
   • The acquisition and development costs of a deal (occurring at time 0), are $1 million. At the end of the first full calendar year the project is sold for $1.1 million.
   • What are the IRR and $ returns to the developer and the fund?
   • What if the project is sold for $3.0 million, what are the IRR and $ returns to the developer and the fund?