What is the expected cash flow and tax liability (or savings) for the first two years for an investment in an apartment building given the following information?
Cost of the building .......... $800,000
Cost of the land .......... 200,000
Required down payment .......... 25%
Interest on balance owed .......... 10%
Annual principal repayment .......... 20,000
Annual operating expenses .......... 30,000
Rent, year 1 .......... 120,000
Rent, year 2 .......... 140,000
Annual depreciation expense .......... 40,000
Individual owner’s income tax rate ...... 30%