What is the cash flow to each party each year

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Question: Assume two people buy a property for $2,000,000 that generates cash flow of $150,000. The partners agree that A (Operator) will contribute 10% and B (Money) will contribute 90%. Both parties will receive 8% on their investment and then split the remaining cash flow 20%]80%, respectively, after receiving their preferred returns. Assume any unpaid preferred return earns interest at 8%. Assume the property has NOI of $150,000 in year one and $200,000 in year two. 1. What is the cash flow to each party each year? 2. What is the Return on Investment for each after two years?

Reference no: EM133633522

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