Use the capital structure for an acquisition $($below$,$ left$)$ and the operating cash flow

for Year $1($below$,$ right$)$ to answer questions $(5)$ thru $(8)$ on following page.

$5.$ Calculate the Going$-$In Cap Rate.

$6.$ Calculate the Equity Dividend Rate $($EDR$).$

$7.$ Calculate the first year Return$-$On$-$Asset $($ROA$).$

$8.$ Calculate the Net Income Multiplier $($NIM$).$

Equity $ $4,500,000$

Debt $ $8,000,000$

Total Capital $ $12,500,000$

Potential Gross Income $ $1,637,000$

Vacancy & Loss $ $(81,850)$

Effective Gross Income $ $1,555,150$

Operating Expenses $ $(590,957)$

Net Operating Income $ $964,193$

Debt Service $ $(320,000)$

Loan Reserves $ $(20,000)$

Before$-$Tax Cash Flow $ $624,193$