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- You purchased a commercial office building for $2,200,000 one year ago. The appraisal noted the value of the land was worth $550,000. You financed the purchase through a debt instrument with a loan-to-value ratio of 60% and an interest rate of 8.00% amortized over 25 years. The property's first year of operations resulted in an NOI of $250,000. Assume an income tax rate of 35% What was the building's cash flow after taxes in year one?A warehouse was purchased for $9MM ($2MM down +$7MM loan) 5 years ago and is recently sold for $10.1MM gross sales price. Assume the following: 27% of the purchase price was attributable to land value • the current mortgage balance is $6.1MM • 25% tax rate on accumulated depreciation • 15% tax rate on capital gain. • 5% selling cost. What is the tax due on depreciation recapture at sale?A property was purchased by a property manager's client for $7,000, 000 with a $2, 000, 000 down payment and a 30 year. $ 5,000, 000 loan with a 7% interest rate. Grous potential income (GPI) for the property is expected to be $850, 000 in year one. Operating expenses are expected to be $350,000 in year one. Both are expected to increase by 3% each year. The property is expected to sell at the end of year five at a 7% going-out capitalization rate with 5% costs of sale. The investor's required rate of returns 12%.
- Four years ago, an investor purchased a five door-apartment for P5.5M. Income from rent exceeded maintenance and insurance cost by P480,000.00 per year. If the property is sold now for P7.55M with an 8.25% income tax charged from capital gain determine the after tax-rate of return realized on the investment.Ans: 14%We acquired a property for $10,000,000 including all fees. We financed its purchase with a $7,000,000 loan that carried an annual interest rate of 5.2%, an amortization period of 25 years and a 5-year term. NOI for year 1 was $1,200,000; year 2 was $1,300,000, and for year 3 NOI was $1,400,000. All cash flow after debt service was paid to the equity investors as distributions at the end of every year. We sold this property at the end of year 3 for $11,000,000 net of all disposition fees. Identify the pre-tax annual cash flows to the equity investors and determine the pre-tax IRR to the equity investors for this investment.-Suppose a 5-year piece of equipment purchased for 500,000 is sold at the end of year 4 after taking four years of straight- line depreciation. Assume that the equipment is sold for 200,000 and the tax rate is 35%. What is the book value? Is there tax savings on the sale? Is there tax effect?
- You buy a property for $100,000 in year 0. The building is depreciated using straight-line depreciation over 27.5 year. The NOI is $5,000 in year 1 and grows at 2% thereafter. The building is sold at a the end of year 4 at a terminal cap rate of 6%. Assume an ordinary income tax rate of 35%, a capital gains tax rate of 20%, and a depreciation recapture tax rate of 25%. What is going to be the total tax bill on the sale? O 1,187 O 1,959 O 3,146 O 3,636An asset with initial cost base of 6 million was bought 5 years ago.At the end of the current year (fifth year) the asset is sold by 1.1 million. The asset belongs to the 7 years MACRS property class. Knowing that the gain (loss) tax rate 40%,what is the net proceeds resulted from selling the asset? Type your answer in ms wordSuppose Hampton Corporation sells land for $8,000,000. Hampton paid $5,000,000 for the land several years ago. Assuming a marginal tax rate of 34%, calculate the after-tax cash flow resulting from the land sale.
- An investor purchased an auto body shop for $200,000 using a mortgage of 70 percent of the purchase price. The loan terms were: 6 percent interest rate, 25-year amortization period, 10-year term, 12 payments per year, and loan costs of 2 percent of loan amount. The buyer incurred acquisition costs of $8,000. At the time of purchase the original basis was allocated 75 percent for improvements and 25 percent for land. The projected NOI for year one is $25,000. This investor's marginal tax rate is 28 percent, so what is the cash flow after tax for year one of the projection? O $10,662 O $11,109 O $12,549 O $14,176Consider 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.The capital cost of a property is $5900000. A CCA rate of 20% is applied. The tax rate is 30%.Take five years of depreciation. Ifthe propertyis sold after five years for $1990000 what is theDisposal Tax Effect?Note: Please enter your answer to two decimal PlacesAnswer