Apache's real estate department is considering buying a hangar and leasing it out to private jet operators.
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Question:
Apache's real estate department is considering buying a hangar and leasing it out to private jet operators. They ask you to calculate the NPV and IRR of the investment and have given you the data below. Assume that the hangar is sold in year 25 and that the mortgage runs 25 year
Item | Value | Inflator |
Square Footage | 1910 | |
Property Price ($) | 1,015,000 | |
Down Payment | 10% | |
Interest Rate | 3.9% | |
Closing Costs at Start | 8.00 | |
Broker Fee in Year 25 | 5% | |
Yearly Property Appreciation | 1.5% | |
Rent/ sq. ft / inflator | 3.00 | 1% |
Op. Costs/year ($)/Inflator | 11,640 | 1% |
Tax Rate | 21% | |
Depreciation/year ($) | 4,524 |
Below is the excel: please show equations used.
Related Book For
Taxes and Business Strategy A Planning Approach
ISBN: 9780132752671
5th edition
Authors: Myron Scholes, Mark Wolfson, Merle Erickson, Michelle Hanlon
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