REFHW_6SFall2007 - Real Estate Finance Homework #6...

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05/12/2009 Real Estate Finance Homework #6 Solutions File:  REFHW#6SFall 2007 Real Estate Finance Homework #6 Solutions Problem #1 a. Assumptions:   NOI Years 1-8 See below   Resale Cap Rate 10% on Year 8 NOI   Discount Rate (Required Rate of Return)  12%   Holding Period = 7 years Year 0 1 2 3 4 5 6 7 8 NOI  $1,250,000   $1,500,000   $1,550,000   $1,600,000   $1,750,000   $1,800,000   $1,900,000   $2,000,000  Resale Value  20,000,000  Total Cash Flow  $1,250,000   $1,500,000   $1,550,000   $1,600,000   $1,750,000   $1,800,000   $21,900,000  NPV = $16,243,331  Problem #1 b. NOI Year 1  $1,250,000  Total Value  $16,243,331  Going-in Cap Rate = 7.70%
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05/12/2009 Real Estate Finance Homework #6 Solutions File:  REFHW#6SFall2007 Problem #2 Problem 2a Assumptions:   Year 1 NOI  $150,000    Annual NOI Increase 3%   Required DCR 1.20   Interest Rate 10%   Amortization 20 years   Holding Period 5 years   Resale Cap Rate 9% on Year 6 NOI   Required Rate of Return
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This homework help was uploaded on 04/18/2008 for the course RE RE Finance taught by Professor Schroer during the Fall '07 term at University of Cincinnati.

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REFHW_6SFall2007 - Real Estate Finance Homework #6...

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