12. A property has an NOI of $800,000. If you have a loan with annual debt service of $600,000, what is the DCR for this investment? 13. You plan to borrow $1,000,000 for 5 years for the purchase of a small apartment building. You secure a floating rate, interest only loan. The index rate is 3% and the margin is 2%. What will be the interest payment in year 1? 14. You are selling a property with an expected NOI of $100,000. If the appropriate cap rate is 10% and you have 2% of selling expenses, what are your expected net sales proceeds?
12. A property has an NOI of $800,000. If you have a loan with annual debt service of $600,000, what is the DCR for this investment? 13. You plan to borrow $1,000,000 for 5 years for the purchase of a small apartment building. You secure a floating rate, interest only loan. The index rate is 3% and the margin is 2%. What will be the interest payment in year 1? 14. You are selling a property with an expected NOI of $100,000. If the appropriate cap rate is 10% and you have 2% of selling expenses, what are your expected net sales proceeds?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Please only answer 12-15
Transcribed Image Text:11. You are purchasing a property with an expected NOI of
$1,050,000 for $15,000,000. What is the going in cap rate?
12. A property has an NOI of $800,000. If you have a loan with
annual debt service of $600,000, what is the DCR for this
investment?
13. You plan to borrow $1,000,000 for 5 years for the purchase
of a small apartment building. You secure a floating rate,
interest only loan. The index rate is 3% and the margin is 2%.
What will be the interest payment in year 1?
14. You are selling a property with an expected NOI of
$100,000. If the appropriate cap rate is 10% and you have 2%
of selling expenses, what are your expected net sales proceeds?
15. You are discussing a mortgage with a lender. He offers you
$500,000 for 30 years with a monthly payment of $2,684.11.
What is the annual interest rate on this loan?
16. You are considering an investment with the following cash
flows:
Year
Cash Flow
-$50,000
$ 7,000
$ 4,000
$9,000
$61,000
1
3
4
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