Task 1 (30 points): Construct the cash flow proforma statement for the following project by filling out the white cells of the following table.

?A 2-year levered equity investment between t=0 and t=2.

?The first NOI is 10 at t=1, and NOI grows at 5%/yr until t=3.

?The cap rate is 5% (going-in) at t=0 and increases by 0.5%/yr to 6% (going-out) at t=2.

?Capital Expenditures are 10% of NOI.

?The investment is levered with a two-year interest-only loan at a 5% interest rate with the face value of 80 (i.e., the initial loan amount is 80).

Cash flow pro forma statement T=0 T=1 T=2 T=3 Today 1 year later 2 years later 3 years later Cash flow at the Cash flows for Cash flows for beginning of the the first period the second project (between t=0 period (between and t=1) t=1 and t=2) and the last CF [Cap Rate] 5.00% 5.50% 6.00% NOI 10.00 10.50 11.03 Acquisition CF at t = 0 (0) Property BT CF Loan at t = 0 (>0) DS incl. the final pmt. (