Purchase price: $$4,200,000$

LTV: $75\%$

Term: $10$ years

Amortization: $30$ years

Interest rate: $7\mathrm{.}00\%$

Closing costs: $$30,000$

Holding period: $4$ years

Annual income taxes: $$5,000($fixed each year $($given$))$

Marginal tax rate: $35\%$

Taxes due on sale: $$200,000($given$)$

Discount rate $($before tax$)$: $15\%$

Operations YEAR $1$ YEAR $2$ YEAR $3$ YEAR $4$

NOI $ $327,000$ $$340,000$ $$325,000$ $ $310,000$

CAPEX $ $(50,000)$ $ $(70,000)$ $ $(80,000)$ $ $0$

PBTCF $ $277,000$ $$270,000$ $ $245,000$

$ $310,000$

Reversion

YEAR $1$ YEAR $2$ YEAR $3$ YEAR $4$

FSP $$5,500,000$

SE $ $(165,000)$

NSP $ $5,335,000$