Assignment_4_Solution_Updated

Assignment_4_Solution_Updated - Prepared by Keyi Xu Problem...

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Prepared by Keyi Xu Problem 1 (1 points) Year Year Year Year 0 1 2 3 Operation CF $200,000 $200,000 $200,000 Capital CF N/A Net $200,000 $200,000 $200,000 89% 80% 71% PV $178,571.43 $159,438.78 $142,356.05 Total NPV (sum of the above row) = $1,761,237.81 Problem 2 (3 points) Year Year Year Year 0 1 2 3 Operation CF $200,000 $200,000 $200,000 Capital CF N/A Discount Rate for intralease 10% 10% 10% PV of operatoin $181,818.18 $165,289.26 $150,262.96 Discount Rate for interlease N/A N/A N/A PV of operatoin $181,818.18 $165,289.26 $150,262.96 Total NPV (sum of the above row) = $1,774,118.35 Problem 3 (5 points) Year Year Year Year 0 1 2 3 Operation CF $200,000 $200,000 $200,000 Capital CF at 10% -$2,000,000 Net -$2,000,000 $200,000 $200,000 $200,000 89% 80% 71% PV -$2,000,000 $178,571.43 $159,438.78 $142,356.05 a. Total NPV (sum of the above row) = -$238,762.19 1 point b. IRR = 9.86% 1 point c. Ini Cash Flow at Ini Yield = 10.00% 1 point d. Yield of Subsequent Cash Flow Growth = 0.97% 1 point Year Year Year Year 0 1 2 3 Operation CF $200,000 $200,000 $200,000 -$2,000,000 Net -$2,000,000 $200,000 $200,000 $200,000 e. Yield of valuation change = -1.10% 1 point Year Year Year Year 0 1 2 3 Operation CF $200,000 $200,000 $200,000 -$2,000,000 Net -$2,000,000 $200,000 $200,000 $200,000 Discount Factor (all at 12% ) Discount Factor (all at 10% ) Capital CF at 10% Capital CF at 10%
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Problem 4 (6 points) Property value: 1,000,000 Appreciation Rate: 2.0% Bldg value/Property value: 90% Cap rate: 10% Income tax rate: 40% LTV: 80% Interest Rate: 10% Amortization Term 30 years Capital gain tax: 20% Dep straightline: 39 years Dep recapture: 20% 1 2 3 4 Unlevered Year Prop Value NOI CI BTCF 0 $1,000,000.00 -$1,000,000.00 1 $1,020,000.00 $100,000.00 $0.00 $100,000.00 2 $1,040,400.00 $102,000.00 $0.00 $102,000.00 3 $1,061,208.00 $104,040.00 $0.00 $104,040.00 4 $1,082,432.16 $106,120.80 $0.00 $106,120.80 5 $1,104,080.80 $108,243.22 $0.00 $108,243.22 6 $1,126,162.42 $110,408.08 $0.00 $110,408.08 7 $1,148,685.67 $112,616.24 $0.00 $112,616.24 8 $1,171,659.38 $114,868.57 $0.00 $114,868.57 9 $1,195,092.57 $117,165.94 $0.00 $117,165.94 10 $1,218,994.42 $119,509.26 $0.00 $1,338,503.68 12.00% a 1 point
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Year Year Year Year Year 4 5 6 7 8 $200,000 $200,000 $220,000 $220,000 $220,000 $200,000 $200,000 $220,000 $220,000 $220,000 64% 57% 51% 45% 40% $127,103.62 $113,485.37 $111,458.85 $99,516.83 $88,854.31 Year Year Year Year 4 5 6 7 $200,000
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Assignment_4_Solution_Updated - Prepared by Keyi Xu Problem...

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