Given the following information regarding an income producing property, determine the net present value (NPV) using unlevered cash flows at a discount rate of 10%. Expected Holding Period: 5 years; 1st year Expected NOI: $90,000; 2nd year Expected NOI: $90,000; 3rd year Expected NOI: $90,000; 4th year Expected NOI: $90,000; 5th year Expected NOI: $90,000; 6th Expected NOI: 110,000; Debt Service in each of the next five years: $60,500; Current Market Value: $875,000; Required equity investment: $225,000; Apply a going-out capitalization rate of 8% to determine the Gross Sales Price at end of year 5 has Closing Expenses of $12,000 and Disposition Fee (Brokerage Commission) of 3% of Gross Sales Price.; Remaining Mortgage Balance at end of year 5: $630,000.
$164,880 |
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$286,874 |
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$86,361 |
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$936,874 |
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