| 10/17/19 |
| ASSUMPTIONS: |
| Asking Price |
| Rent year 1 |
| Growth-Rent |
| Vacancy & Coll. Loss | of rents |
| Management | of EGI |
| Operating Expenses |
| Loan-to-Value |
| Loan Interest |
| Loan term | years |
| Growth in Value/Op Expenses |
| Holding Period | years |
| Selling costs | of sale price |
| Equity discount rate |
| Reinvestment rate |
| Tax rate |
| Cap Gains/Dep Recapture Tax |
| Equity |
| Loan |
| Montly Mortgage Payment |
| Annual Debt Service |
| Mortgage Balance | year end | 0 |
| Year | 1 | 2 | 3 | 4 | 5 |
| PGI |
| Vacancy & Collection Loss |
| EGI |
| Operating Expenses |
| Mangement |
| NOI |
| Debt Service |
| BTCF |
| Cash flow from sale in year | 4 | Marginal Return |
| Sales Price |
| Selling costs |
| Mortgage Balance |
| Before-tax cash flow from sale |
| BTCF Total |
| (a) BTIRR/MIRR ON EQUITY |
| BTIRR on Equity |
| BTMIRR on Equity |
| (b) AFTER TAX IRR AND EFFECTIVE TAX RATE |
| Taxable Income |
| 0 | 1 | 2 | 3 | 4 |
| NOI |
| Interest |
| Depreciation |
| Taxable Income |
| Tax Cost (Savings) |
| ATCF from Operations |
| Sales Price |
| Sales costs |
| Mortgage Balance |
| Before-tax cash flow from sale |
| Sales Price Less Selling Costs |
| Original Basis |
| Accumulated Depreciation |
| Adjusted Basis |
| Capital Gain/Price Appreciation |
| Depreciation Recapture |
| Cap Gain Tax |
| Depreciation Recapture Tax |
| Tax on Sales Proceeds |
| After-tax Cash Flow From Sale |
| ATCF Total |
| ATIRR |
| NOTE this is where the TABLE command comes in handy |
| Part II Sensitivity Test a-d |
| Calculating Variance of Returns |
| Office Building |
| Scenario | BTIRR | Probability (P) | (Return x Probability) | Deviation (R - Expected R) | Squared Deviation | P x (R-Expected R)sq |
| Pessimistic (20%) |
| Most Likely (15%) |
| Optimistic (10%) |
| Expected Return |
| Variance |
| Standard Deviation |
| Coefficient of Variation |
| Calculating Variance of Returns |
| Office Building |
| Scenario | ATIRR | Probability (P) | (Return x Probability) | Deviation (R - Expected R) | Squared Deviation | P x (R-Expected R)sq |
| Pessimistic (20%) |
| Most Likely (15%) |
| Optimistic (10%) |
| Expected Return |
| Variance |
| Standard Deviation |
| Coefficient of Variation |
| Part II Marginal Return Comparison e |
| If sold year 4 | If sold year 5 |
| Sale price |
| Selling Costs |
| Mortgage balance |
| Capital gain tax |
| Cash flow |
| Marginal return = (Cash flow if sold next year + NOI over next year - Cash flowfrom sale if sold today) / Cash flow if sold today |
| Marginal return = ( | ) |
shaokumu
exam2_template.xlsx
