Key Assumptions Construction cost ($) Loan ($) Loan interest rate $1,000,000.00 500,000 Start 1 2 3 4 5 6 4.8% Loan term (yrs.) 5 Hangar space (sq.ft.) 22,000 Rent ($/sq.ft. per month 1.30 Rent inflator 2.0% Operating Costs ($/yr.) 140,000 Cost inflator 2.0% Tax rate 21.0% Discount rate 6.5% Depreciation/year 20,000 Cash Flows N 8 9 10 TV Rent Income minus: Operating Costs minus: Interest minus: Depreciation = Taxable Income minus: Taxes = Net Income minus: Principal = Net Operating Cash Flow minus: Cash Outlay at Start plus: Depreciation = Total Cash Flows NPV IRR Note: Tax shields are the tax gains from expensing interest and depreciation. The formula is interest or depreciation expense times the tax rate