Using the assumptions in the box at the top solve the spreadsheet.

(a) 70% LOAN (70% and 10% are the original variables contained in the template. It must be changed for any other answer.) ASSUMPTIONS: $2,000,000 $190,000 3.00% 70.00% 10.00% Tax Considerations: Building Value Depreciation Tax rate $1,600,000 275 years 36.00% Asking Price NOI year 1 Growth-NOI Loan-to-Value Loan Interest Loan term Payments per year Appreciation rate Holding Period Selling costs 25 years *To be applied to all items of income, capital gains and recapture of depreciation. 12 3.00% 5 years 0.00% of sale price Equity Loan 3 Annual Loan Payment 4 Mortgage Balance year 5 1 2 3 4 5 1 SUMMARY LOAN INFORMATION: 6 7 End of Year 8 Payment 9 Mortgage Balance 0 Interest 31 Principal 32 33 34 35 Year 36 NOI 37 Debt Service 38 Before-tax Cash Flow 39 40 NOI 41 Less: Interest 42 Depreciation 43 Taxable income 44 Tax (Savings) 45 After-tax Cash Flow 46 2 3 4 5 After-tax Cash Flow 5 Cash flow from sale in year Sales Price Sales costs Mortgage Balance Before-tax cash flow Original Cost Basis Accumulated Depreciation Adjusted Basis Capital Gain Depreciation Recap Total Gain on Salae Tax from Sale After-tax cash flow from sale EQUITY Year a 1 2 3 4 3 7 BTCF B BTIRR on Equity Year 1 2 3 0 1 ATCF 2 ATIRR on Equity 3 4