Question: Please help answer question according to attached figures 25. You are considering the purchase of an office building for $1,500,000. Your projections are these: First

Please help answer question according to attached figures


25. You are considering the purchase of an office building for $1,500,000. Your projections are these: First year potential gross income is $340,000 ' Vacancy and collection losses are 10% of potential gross income ' Operating expenses equal 40% of effective gross income Capital expenses equal 5% of effective gross income (\"above-the-line\") You have arranged a $900,000 ten-year first mortgage loan, with an annual interest rate of 5%. The principal will be partially amortized over 10 years with a monthly payment of $6,000 Total up-front financing fees will equal 2% of the loan amount. e. (5 points) Calculate the equity dividend rate (also known as the \"cash on cash\" return) f. (2.5 points) Calculate the loan to value (LTV) ratio g. (2.5 points) Calculate the debt coverage ratio
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