Given the following information, please cPurchase Price: $900,000 Loan: $750,000, 5%, 25 years (annual payments) Year 1 NOI: $100,000 Year 2 ATCF: $33,000 Year 3 ATCF: $34,000 Use an 85/15 ratio for depreciation. 39 year, straight line. 35% tax rate on income, 15% on long term capital gains, 25% depreciation recapture. What is the after tax cash flow from the sale at the end of year 3? and what is the IRR of the investment?
Given the following information, please cPurchase Price: $900,000 Loan: $750,000, 5%, 25 years (annual payments) Year 1 NOI: $100,000 Year 2 ATCF: $33,000 Year 3 ATCF: $34,000 Use an 85/15 ratio for depreciation. 39 year, straight line. 35% tax rate on income, 15% on long term capital gains, 25% depreciation recapture. What is the after tax cash flow from the sale at the end of year 3? and what is the IRR of the investment?
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 16EA: Project B cost $5,000 and will generate after-tax net cash inflows of $500 in year one, $1,200 in...
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Transcribed Image Text:Given the following information, please cPurchase Price: $900,000 Loan: $750,000, 5%, 25 years (annual payments)
Year 1 NOI: $100,000 Year 2 ATCF: $33,000 Year 3 ATCF: $34,000 Use an 85/15 ratio for depreciation. 39 year, straight
line. 35% tax rate on income, 15% on long term capital gains, 25% depreciation recapture. What is the after tax cash flow
from the sale at the end of year 3? and what is the IRR of the investment?
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