Evaluate the purchase of an existing 1200 unit apartment complex for $6200000, the building is assumed...
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Evaluate the purchase of an existing 1200 unit apartment complex for $6200000, the building is assumed to have a 20 year functional life. Treat the rents as being collected at the end of each year, along with associated variable and fixed costs. Assum rent controls will prohibit the rent from being raised over the life of the building. Assume that the underlying property reverts to the original owners at the end of twenty years, and that you will also be responsible for demolition and clean-up costs, to be incurred at the end of the building's life. year Rentals are estimated at 1080 units per Each unit will be rented for a cumulative monthly amount of $9500 per year year Cost per unit when rented $6600 per Fixed costs $450000 per year for the building, other than the initial investment tax line using debt Demolition/Clean up $4000000 after- Depreciation is to be straight- Assume the project can be financed at 10.5% (before-tax) Tax Rate is 38% Evaluate the purchase of an existing 1200 unit apartment complex for $6200000, the building is assumed to have a 20 year functional life. Treat the rents as being collected at the end of each year, along with associated variable and fixed costs. Assum rent controls will prohibit the rent from being raised over the life of the building. Assume that the underlying property reverts to the original owners at the end of twenty years, and that you will also be responsible for demolition and clean-up costs, to be incurred at the end of the building's life. year Rentals are estimated at 1080 units per Each unit will be rented for a cumulative monthly amount of $9500 per year year Cost per unit when rented $6600 per Fixed costs $450000 per year for the building, other than the initial investment tax line using debt Demolition/Clean up $4000000 after- Depreciation is to be straight- Assume the project can be financed at 10.5% (before-tax) Tax Rate is 38%
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Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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