Attached is a word document that has some problems regarding real estate. You are to answer each question andSHOW ALL YOUR WORK OR EXPLANATIONSfor each question in the word document attached.

1. Assume that you are an investment analyst preparing an analysis of an investment opportunity for a client. Your client is considering the acquisition of an apartment complex from a developer at the point in time when the apartments are ready for first occupancy. Your have developed the following information. 1) Number of units = 36 2) First year market rent per unit = $450 per month 3) Rent is projected to increase by 8% each year 4) Annual vacancy rate = 3% of PGI 5) Annual collection loss = 2% of PGI 6) Annual operating expense = 35% of EGI 7) Miscellaneous yearly income (parking and washers/dryers) = $800 8) Monthly miscellaneous income is expected to remain constant 9) Purchase price = $2,000,000 10) Estimated value of land = $500,000 11) Anticipated mortgage terms: a) Loan to value ratio = .80 b) Interest rate = 6% c) Years to maturity = 25 d) Points charged = 3 e) Prepayment penalty = 2% of outstanding balance f) Level payment, fully amortized f) Fixed interest rate, annual payments 12) Anticipated holding period = 4 years 13) Proportion by which property is expected to appreciate during the holding period -- 5% a year 14) Estimated selling expenses as proportion of future sales price = 5% 15) Marginal income tax rate for the client = 28% 16) It is assumed that the property is put into service on January 1st and sold on December 31st 17) Assume the client is "active" in the property management 18) It is assumed that the client has an adjusted gross income of $95,000 and has no other passive income not offset by other passive losses (for each year of the anticipated holding period) 19) Client's minimum required after tax rate of return on equity = 11% Calculate: a. The before-tax and after-tax cash flows for each year of the holding period and the beforetax and after-tax equity reversion. SHOW ALL WORK HERE: b. For the first year of operation the: ) Overall (cap) rate of return SHOW ALL WORK HERE: ) Equity dividend rate SHOW ALL WORK HERE: ) Gross income multiplier SHOW ALL WORK HERE: ) Debt coverage ratio SHOW ALL WORK HERE: c. The after-tax net present value and the after-tax internal rate of return. SHOW ALL WORK HERE: d. Is this an investment that should be considered? Explain. SHOW ALL WORK HERE: 2. Suppose you have developed the following information for a potential investment: current market value is $1,200,000; anticipated loan to value ratio is .80 with 2 points; and predicated cash flows of ATCF1= $38,560, ATCF2= $41,780, ATCF3= $37,210, ATCF4= $39,127, and ATER4= $191,730. Further, assume the investor's minimum required after-tax rate of return on equity is 12%. a. What is the internal rate of return on this potential investment? SHOW ALL WORK HERE: . What is the profitability index on this investment? SHOW ALL WORK HERE