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1. You have been asked to analyze the acquisition of an office property for $10 million with the below estimated NOI estimates at the end of each year and an assumption it will be sold at the end of the 3rd year to an investor with 5.8% cap rate, which you will then incur selling expenses of 6%. RBS has offered you a 3-year $7 million interest-only loan at 6.5% to finance the acquisition with $40,000 in origination fees. Year 1: $641,385 Year 2: $662,792 Year 3: $679,231 Year 4: $690,692 A. What is the unlevered Cash-On-Cash, Equity Multiple, IRR of the investment? B. What is the EBC, LTV, DCR, DYR of the acquisition with the $7 million loan? C. What is the required equity, levered Cash-On-Cash, Equity Multiple, IRR of the investment?

1. You have been asked to analyze the acquisition of an office property for $10 million with the below estimated NOI estimates at the end of each year and an assumption it will be sold at the end of the 3rd year to an investor with 5.8% cap rate, which you will then incur selling expenses of 6%. RBS has offered you a 3-year $7 million interest-only loan at 6.5% to finance the acquisition with $40,000 in origination fees. Year 1: $641,385 Year 2: $662,792 Year 3: $679,231 Year 4: $690,692 A. What is the unlevered Cash-On-Cash, Equity Multiple, IRR of the investment? B. What is the EBC, LTV, DCR, DYR of the acquisition with the $7 million loan? C. What is the required equity, levered Cash-On-Cash, Equity Multiple, IRR of the investment?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1. You have been asked to analyze the acquisition of an office property for $10 million with the below estimated NOI estimates at the end of each year and an assumption it will be sold at the end of the 3rd year to an investor with 5.8% cap rate, which you will then incur selling expenses of 6%. RBS has offered you a 3-year $7 million interest-only loan at 6.5% to finance the acquisition with $40,000 in origination fees. Year 1: $641,385 Year 2: $662,792 Year 3: $679,231 Year 4: $690,692 A. What is the unlevered Cash-On-Cash, Equity Multiple, IRR of the investment? B. What is the EBC, LTV, DCR, DYR of the acquisition with the $7 million loan? C. What is the required equity, levered Cash-On-Cash, Equity Multiple, IRR of the investment?
Transcribed Image Text:1. You have been asked to analyze the acquisition of an office property for $10 million with the below estimated NOI estimates at the end of each year and an assumption it will be sold at the end of the 3rd year to an investor with 5.8% cap rate, which you will then incur selling expenses of 6%. RBS has offered you a 3-year $7 million interest-only loan at 6.5% to finance the acquisition with $40,000 in origination fees. Year 1: $641,385 Year 2: $662,792 Year 3: $679,231 Year 4: $690,692 A. What is the unlevered Cash-On-Cash, Equity Multiple, IRR of the investment? B. What is the EBC, LTV, DCR, DYR of the acquisition with the $7 million loan? C. What is the required equity, levered Cash-On-Cash, Equity Multiple, IRR of the investment?
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