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Suppose that you are contemplating an investment in an apartmentbuilding. Use the information provided below to answer thequestions that follow: Type of Property: Apartment Building Numberof Units: 30 Average Rent: $1,500 per unit per month ExpectedGrowth in Rents: 5% per year Vacancy and Collection Losses: 5% ofPotential Gross Income Other Income: $50 per unit per monthExpected Growth in Other Income: 3% per year Operating Expenses:35% of Effective Gross Income Capital Expenditures: 4% of EffectiveGross Income Selling Expenses: 5% of Future Selling Price Going-OutCap Rate: 6.5% Expected Purchase Price: $5.25 million Loan Terms:Loan Amount: 85% of purchase price Interest Rate: 4.5% per yearwith monthly payments and monthly compounding Amortization Term: 30years a. What is the net present value of the before-tax unleveredcash flows if you assume a five-year holding period and a discountrate of 12%? b. What is the internal rate of return of thebefore-tax levered cash flows if you still assume a five-yearholding period?