Problem $18-2$

Venture Capital Limited has formed a private real estate syndication to acquire and operate the Tower Office Building. Venture will act

as the general partner and will have $35$ individual limited partners. The venture to be undertaken and relevant cost and financial data

are summarized as follows:

Partnership facts and equity requirements

Organization: December, year $1$

Number of partners: $1$ general partner and $35$ limited partners

Equity capital contribution: General partner, $10\%$; limited partners, $90\%$

Cash assessments: None

Cash distributions from operations: General partner, $10\%$; limited partners, $90\%$

Taxable income and losses from operations: General partner, $10\%$; limited partners, $90\%$

Allocation of gain or loss from sale: General partner, $15\%$; limited partners, $85\%$

Cash distribution at sale: Based on capital account balances

Required:

a$.$ Determine an estimated return $($ATIRR$\_($e$))$ for a limited partner. $($Hint: Consider all $35$ limited partners as a single investor.$)$

b$.$ Determine an estimated return $($ATIRR$\_($e$))$ for the general partner.

Answer is complete but not entirely correct.

Complete this question by entering your answers in the tabs below.

Determine an estimated return $($ATIRR$\_($e$)$:$\})$ for a limited partner. $($Hint: Consider all $35$ limited partners as a single investor.$)$

$($Round your answer to $2$ decimal places.$)$

Required:

Use the above assumptions to calculate the cash flows that each party will receive and its expected IRR.

Note: Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your final answer to

the nearest whole dollar. Round IRR answers to $2$ decimal places.

$*$for the picture with the answers, the first row is correct, along with $0$ for Newtown Developers in Year $1,$ additionally the Newtown IRR is correct