Please answer all parts. Question 1) Purchase price: $395,000 Mortgage Amount: 80% LTV, 30 year fixed at 5% PAID ANNUALLY. Loan Origination expenses: 3% of total loan amount. NOI: $48,000 / Year Required return on investment (levered): 11% Expected price appreciation: 5% per year Selling Expenses: 4% Expected holding period: 2 Years What is the levered cash flow at time 0? What is the levered cash flow at time 1? What is the before tax equity reversion (BTER)? What is the total levered cash flow for time 2? What is the levered IRR?
Please answer all parts. Question 1) Purchase price: $395,000 Mortgage Amount: 80% LTV, 30 year fixed at 5% PAID ANNUALLY. Loan Origination expenses: 3% of total loan amount. NOI: $48,000 / Year Required return on investment (levered): 11% Expected price appreciation: 5% per year Selling Expenses: 4% Expected holding period: 2 Years What is the levered cash flow at time 0? What is the levered cash flow at time 1? What is the before tax equity reversion (BTER)? What is the total levered cash flow for time 2? What is the levered IRR?
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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Please answer all parts.
Question 1)
Purchase price: $395,000 Mortgage Amount: 80% LTV, 30 year fixed at 5% PAID ANNUALLY. Loan Origination expenses: 3% of total loan amount. NOI: $48,000 / Year Required return on investment (levered): 11% Expected price appreciation: 5% per year Selling Expenses: 4% Expected holding period: 2 Years
What is the levered cash flow at time 0?
What is the levered cash flow at time 1?
What is the before tax equity reversion (BTER)?
What is the total levered cash flow for time 2?
What is the levered IRR ?
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