2. (Return Metrics) -15 points Calculate cash-on-cash return and equity multiple using the information given...
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2. (Return Metrics) -15 points Calculate cash-on-cash return and equity multiple using the information given below. (10 points) Explain the difference between cash-on-cash and equity multiple. (5 points) Year 1 Year 2 Year 3 Year 4 Year 5 Acquisition ($4,000,000) $300,000 $309,000 $318,270 $327,818 Cash-on-Cash Purchase Price Cash Flow Net Sale Proceeds Total Cash Flow Cash-on-Cash Return $337,653 $4,000,000 $4,337,653 8.44% ($4,000,000) $300,000 7.50% $309,000 7.73% $318,270 7.96% $327,818 8.20% Average Cash-on-Cash Year 1 Year 2 Year 3 Year 4 Year 5 Acquisition ($4,000,000) Equity Multiple Purchase Price Cash Flow Net Sale Proceeds Total Cash Flow $300,000 $309,000 $318,270 $327.818 $337,653 $4.000.000 $4,337,653 ($4,000,000) $300,000 $309,000 $318,270 $327,818 Equity Multiple
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