Business, 28.11.2019 02:31 kadenbaker4788

You are an employee of university consultants. ltd., and have been given the following assignment. you are to present an investment analysis of a new small residential income producing property for sale to a potential investor. the asking price for the property is $1, 250,000; rents are estimated at $200,000 during the first year and are expected to grow at 3 percent per year thereafter. vacancies and collection losses are expected to be 10 percent of rents. operating expenses will be 35 percent of effective gross income. a 70 percent loan can be obtained at 11 percent interest for 30 years. the property is expected to appreciate in value at 3 percent per year and is expected to be owned for five years and then sold. what is the investor's expected before-tax internal rate of return on equity invested (btirr)? what is the first-year debt coverage ratio? what is the terminal capitalization rate? what is the npv using a 14 percent discount rate? what does this mean?

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