A warehouse is bought at the capitalization ratio of 8.5% for $1,000,000. The buyer used a 65%LTV loan with 6% interest amortized over 15 years, with monthly payments. What is the expectedbefore-tax cash flow for the first year of operations?$19,179$5,485Impossible to answer the question from the information provided.$65,821$85,000

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Description: A warehouse is bought at the capitalization ratio of 8.5% for $1,000,000. The buyer used a 65%LTV loan with 6% interest amortized over 15 years, with monthly payments. What is the expectedbefore-tax cash flow for the first year of operations?$19,179

Purchasing cost = $1,000,000Capitalization ratio = 8.5%The buyer used a 65% LTV loanInterest rate =…

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A warehouse is bought at the capitalization ratio of 8.5% for $1,000,000. The buyer used a 65% TV loan with 6% interest amortized over 15 years, with monthly payments. What is the expecte before-tax cash flow for the first year of operations? $19,179 $5,485 O Impossible to answer the question from the information provided. O $65,821

A warehouse is bought at the capitalization ratio of 8.5% for $1,000,000. The buyer used a 65% TV loan with 6% interest amortized over 15 years, with monthly payments. What is the expecte before-tax cash flow for the first year of operations? $19,179 $5,485 O Impossible to answer the question from the information provided. O $65,821

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 15EA: Project A costs $5,000 and will generate annual after-tax net cash inflows of $1,800 for five years....

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