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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- Project the OCFs for the next three years considering incomes of $165k, $170K and $180 respectively, and a depreciation of $15K, $16K and $18K respectively. Consider a tax of 25%. (Use the following format: "$11.111; $11.111; $11.111) Answer. $65.588;$69.325;$76.800 Then, calculate the NPV (of the three years projected, don't include the current one) if your investment is $150K and the cost of opportunity is 10% (use the following format: $11.111) Answer $24.619 Decide if you invest or not in this project (use the following format: "Yes" or "No") Answer NoI need the process pleasePertinent information for two alternatives A and B is shown below. If i=10%/year and the effective income tax rate is 40%, answer the following true/false questions. Alt. A Alt.B 300,000 50,000 Basis, $ CFBT, $ MACRS Recovery, Years Salvage Value, $ Useful Life, Years O True 200,000 O False 40,000 5 20,000 6 The CFAT of Alt. B at the end of year 1 is less than $5,000. 5 30,000 7Pertinent information for two alternatives A and B is shown below. If i=10%/year and the effective income tax rate is 40%, answer the following true/false questions. True Alt. A 200,000 40,000 Basis, $ CFBT, $ MACRS Recovery, Years 5 Salvage Value, $ Useful Life, Years The CFAT at the end of year 7 for Alt. B is greater than $50,000. False 20,000 Alt.B 300,000 50,000 6 5 30,000 7
- Based on the following information, what is the company's Unlevered FCF for the period: EBIT of $500 mm, tax rate of 20%, Depreciation and Amort of $200 mm, Capex of $250 mm and an investment of $50 mm in Net Working Capital. a. $500 mm b. $300 mm c. $650 mm d. $225 mm Please answer fast i give you upvote.Consider a piece of equipment that initially cost $8,000 and has these estimated annual expenses and MV: End of Year, k 1 2 3 6 7 8 5 years 3 years 4 years If the after-tax MARR is 7% per year, determine the after-tax economic life of this equipment. MACRS (GDS) depreciation is being used (five-year property class). The effective income tax rate is 40%. 6 years Annual Expenses 7 years $3,000 3,000 3,500 4,000 4,500 5,250 6,250 7,750 MV at End of Year $4,700 3,200 2,200 1,450 950 600 300 0 Reread chapter and try again. Use equation to calculate the TC for each year of retention, and solve for EUAC of each year.Consider an income property that is under evaluation for purchase with a $489,398 loan, 3.3% interest rate, compounded annually, amortized over 29 years. The NOI at the end of year 1 is $48,148, year 2 is $54,192, and year 3 is 55,470. At the end of year 3, the property is estimated to sell for $525,700. Discount the equity cash flows over the 3-year holding period at 6.0 percent. Using the principles of mortgage equity capitalization, what is the estimated total property value with a holding period of 3 years? Please post step by step solve.
- Consider a piece of equipment that initially cost $8,000 and has these estimated annual expenses and MV: End of Annual Year, k Expenses 1 2 3 4 5 6 7 8 5 years 3 years 6 years $3,000 3,000 3,500 4,000 7 years 4,500 5,250 6,250 7,750 If the after-tax MARR is 7% per year, determine the after-tax economic life of this equipment. MACRS (GDS) depreciation is being used (five-year property class). The effective income tax rate is 40%. MV at End of Year $4,700 3,200 2,200 1,450 950 600 300 0A warehouse is bought at the capitalization ratio of 8.5% for $1,000,000. The buyer used a 65% LTV loan with 6% interest amortized over 15 years, with monthly payments. What is the expected before-tax cash flow for the first year of operations? $19,179 $5,485 Impossible to answer the question from the information provided. $65,821 $85,000The following details are available for Gamma Ltd: Details Proposal A Proposal B Initial Cost Rs.10,00,000 Rs. 12,00,000 Expected life 4 years 5 years Profits before tax after depreciation Rs. 3,00,000 each for first two years Rs. 3,50,000 each for next two years Rs. 3,00,000 each for first two years Rs. 3,50,000 each for next three years Calculate Discounted Payback period and suggest which one is better if the discounting factor is 10% and tax rate 30%. Show in detail relevant calculations and use Straight Line Method of Depreciation
- In year 0 you purchase an asset for $500,000 and in year 1 you receive a positive cash flow of $100,000 from operating the asset. Following a MACRS 7-year depreciation schedule (year 1 recovery rate of 14.29 percent) and assuming you are in a 39% tax bracket, what is your year 1 after tax cash flow (ATCF) to the nearest $50 ? O a) $88,750 O b) $28,550 c) $400,000 O d) $380,750 O e) $11,250The following information related to a real estate asset investment that is fully financed using REITS equityProject costs:Land. Ksh 300000Buildings. Ksh 2500000Total costs. Ksh 2800000Operating data:Initial rent Ksh 522100Growth in rent. 8% per yearVacancy rate. 6% of gross rentOther income. 1% of gross rentOperating expenses. 16% of gross rent for one yearGrowth in expenses. 7% per yearGrowth in resale price. 6%Selling expenses. 5% of resale priceDepreciation (straight line 27.5 years, mid-month convention Put at service at beginning of the year)Holding period. 5 yearsMarginal tax rate. 30%Capital gains tax rate. 15%Depreciation recovery tax rate. 25%Estimated sale price. Ksh 3747032Selling expenses. Ksh 187352 Required:a). Operating cash flows for the first 5 yearsb). After tax cash flows from the sale of propertyc). Net present value assuming cost of capital of 15%d). What are the factors that will be considered before investing in the assetConsider a piece of equipment that initially cost $8,000 and has these estimated annual expenses and MV: If the after-tax MARR is 7% per year, determine the after-tax economic life of this equipment. MACRS (GDS) depreciation is being used (five-year property class). The effective income tax rate is 40%.