Question: V=D+E D= L/V*V E= [(NOI - (LIV*V)/ a[[m,kd ]] )* a[n,ke ]] ] + (Vn-%OSB*L/V*V)/(1+ke) ke = 18% L/V = .80 n = 8 yrs

V=D+E D= L/V*V E= [(NOI - (LIV*V)/ a[[m,kd ]] )*
V=D+E D= L/V*V E= [(NOI - (LIV*V)/ a[[m,kd ]] )* a[n,ke ]] ] + (Vn-%OSB*L/V*V)/(1+ke)" ke = 18% L/V = .80 n = 8 yrs Sell price = 1.1 * Purchorice = 1.1V kd = 15% m = 25 yrs NOI yr1 = $6000 E= [(NOI - (LIV*V)/ a[[m,kd ]] )* a[[n,ke ]] ] + (Vn-%OSB*L/V*V)/(1+ke)" E = (6000 - (.8V / 6.464)) * 4.078) + ((1.1V - (.9355 * .8V))/3.759 E= ((6000 - .1238V) * 4.078) + (1.1V - .7484V)/3.759 E = 24,468 - .5047V + (.3516V/3.759) E = 24,468 - .5047V + .0935V E = 24,468 - .4112 V D = . 8 V V = 8V + 24,468 - .4112 V .3888 V + 24,468 6112 V = 24,468 V = 40,033 This property would be purchased for ~ $40,000, with a $32,000 mortgage and $8,000 equity. E= [(NOI - (LIV*V)/ a[[m,kd ]] )* a[[n,ke ]] ] + (Vn-%OSB*L/V*V)/(1+ke)" Assignment questions ke = 13% L/V = .80 n = 7 yrs Sell price = 1.6 * Purchorice = 1.6V kd = 6.8% m = 25 yrs NOl yr1 = $12,000 1. Using the above information, calculate the value of the property AND the debt and equity components. 2. How would the answers change if debt was: a) reduced to 40% b) not utilized (ie: 100% equity)

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