Consider the following values. NOIn+1: $2.8 million. Cap rate: 7.5%. Brokerage commission: 3%.Remaining mortgage balance: $12 million. Remaining book value: $14 million. Total depreciation taken:$4.9 million. Recapture tax (for depreciation taken): 25%. Tax on capital gain: 20%. What is the after-taxcash flow from the sale?Excel Link: Excel Sheet.xlsx$12,870,667$19,525,667$19,770,667$24,213,333

Understanding the Concepts:Cap Rate: This is a fundamental real estate metric. It represents the…

Answered: Consider the following values. NOIn+1:…

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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Determine the present worth in year 0 of the following cost. Interest rate is 10% per year. Year Cost ($1000) 0 -850 1 -300 2 -400 -400 -400 -500 WN 3 4 5
The annual debt service on a property is $25,000 and the pre-tax cash flow is $50,000. If the mortgage capitalization rate is 8.5% and the overall rate is 10%, what is the indicated value of the property?
Consider the streams of income given in the following table: a. Find the present value of each income stream, using a discount rate of 4%, then repeat those calculations using a discount rate of 8%. b. Compare the calculated present values and discuss them in light of the fact that the undiscounted total income amounts to $14,000 in each case. a. The present value of income stream A. using a discount rate of 4% is §. (Round to the nearest cent) Data table Income Stream End of Year A $5,000 $4,000 $3,000 $2,000 $2,000 $3,000 1 $4,000 4 $5,000 Total $14,000 $14,000 (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Clear all Check answer Help r
Pertinent information for two alternatives A and B is shown below. If i=10 % / year and the effective income tax rate is 35%, answer the following true/false questions. Alt. A Alt.B 150,000 225,000 100,000 100,000 30,000 10,000 15,000 22,500 ADS-6: Years Recovery Period GDS: 5-Years Recovery Period Basis, $ Gross Income (Gl), $ Operating Expense (OE), $ Salvage Value, $ MARCS Depreciation Method The CFAT at the end of year 7 for Alt. A is less than $50,000. True O False
Fill in the missing numbers for the following income statement. (Do not round intermediate calculations.) Sales Costs Depreciation EBIT Taxes (24%) Net income b. b. Calculate the OCF. (Do not round intermediate calculations.) c. What is the depreciation tax shield? (Do not round intermediate calculations.) C. $ OCF 662,600 424,300 100,700 Depreciation tax shield
Clementine County's assets have a market value of $5,000,000 and a duration of 11 at the current market interest rate of 2.5%. Use the duration formula to estimate the value of the assets if the market interest rate changes from 2.5% to 2.2%. O 5.161 million O 5.247 million O 5.032 million 4.917 million
Answer ASAP please write the formula used please.
Exxon-Mobil's receipts and disbursements are shown below. Calculate the future worth in year 7 at an interest rate of 8% per year. Year Cash Flow, S -6,000 1 5,000 2 4,000 3 5,000 4 5,000 -1,000 7,000 7 8,000 O $31,023.34 O S18,101.82 O $19,998.37 O 331,312.27
1. To calculate the after-tax cost of debt, multiply the before-tax cost of debt by ______. 2. Western Gas & Electric Company (WGC) can borrow funds at an interest rate of 12.50% for a period of six years. Its marginal federal-plus-state tax rate is 25%. WGC’s after-tax cost of debt is ________. (rounded to two decimal places). 3. At the present time, Western Gas & Electric Company (WGC) has 15-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have a current market price of $1,555.38 per bond, carry a coupon rate of 11%, and distribute annual coupon payments. The company incurs a federal-plus-state tax rate of 25%. If WGC wants to issue new debt, what would be a reasonable estimate for its after-tax cost of debt (rounded to two decimal places)? (Note: Round your YTM rate to two decimal place.) 4.73% 4.11% 4.93% 3.29%
Jay

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