A property is bought for $500,000. Its land value is $110,000. The rest is the depreciable basis.

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Question:

A property is bought for $500,000. Its land value is $110,000. The rest is the depreciable basis. It is a non-residential property. It is purchased with a loan equal to 50% of its value, at 5%, for 25 years. The tax rate is 40%. It's net operating income is $30,000. What are its first year's expected cash flows after taxes?

Group of answer choices

a. $12,463

b. $7,617

c. $9,417

d. $3,046