What is the purchase price for this asset

Assignment Help Accounting Basics
Reference no: EM132963458

Question - An apartment building has the following investment characteristics:

Year 1 NOI $3,000,000

Year 2 NOI $3,100,000

Year 3 NOI $3,200,000

Year 4 NOI $3,300,000

You can purchase the asset at a 5% going in cap rate. You plan to sell it in 3 years and believe that you will be able to sell it a 5% cap rate as well. You plan to use 60% LTV for the purchase. The loan will be interest only at a 4% annual interest rate.

Required -

1. What is the purchase price for this asset?

2. What is your initial equity investment?

3. How much is the annual mortgage payment?

4. What is the loan balance at the end of year 3?

5. What is your expected levered IRR?

Reference no: EM132963458

Questions Cloud

How to access the pipeline for industry : Analyze how the talent pipeline offers the best candidates to organizations, and determine how to access the pipeline for your industry or profession.
What is significance of the section auditor responsibility : What specific information/data are contained in the introductory paragraph? What is the significance of the section "auditor's responsibility" in audit report
Opinions about the effect offshoring and outsourcing : Considering what you have learned, what are your personal opinions about the effect offshoring and outsourcing has on employees, customers, and organizations?
Develop and implement a qualitative research plan : Justify the alignment of theory with qualitative approach, research purpose, and research questions and Develop a qualitative research plan that is aligned
What is the purchase price for this asset : You plan to sell it in 3 years and believe that you will be able to sell it a 5% cap rate as well. What is the purchase price for this asset
Discuss the typical steps in a grievance procedure : Discuss the typical steps in a grievance procedure.
Financial ratios analysis approach : You are asked to visit the website of a listed company in The New York Stock Exchange of your choice and download its financial statements.
Write an essay reflecting on a stressful job : Write an essay reflecting on a stressful job that you previously held, or interview someone who has had a stressful job.
Prepare Yordi manufacturing overhead budget for January : Yordi budgets $9 per unit for variable manufacturing overhead; Prepare Yordi's manufacturing overhead budget for January and February

Reviews

Write a Review

Accounting Basics Questions & Answers

  Why the company would most likely use the costing system

Why the company would most likely use the costing system identified. Identify if the company assigned to you would likely use job-order costing, process costing

  What are the greatest risk you confront

Rupiah futures, Oil futures, or both? And what are the greatest risk(s) you confront, once you are using futures contracts to hedge this transaction

  Make all the necessary journal entries for usa company

MAKE ALL THE NECESSARY JOURNAL ENTRIES FOR USA COMPANY IN 2016 AND 2017. Remember, USA entered into a covered forward contract on October 2nd.

  The revenues and the expenses of a proprietary fund

What is the cause and effect relationship between the revenues and the expenses of a proprietary fund?

  Prepare a bank reconciliation for business solutions

Santana Rey receives the March bank statement for Business Solutions on April 11, 2012. The March 31 bank statement shows an ending cash balance of $67,566.

  The crestar company reported net income of 87400 on 18000

the crestar company reported net income of 87400 on 18000 outstanding common shares. preferred dividends total 11800.

  Prepare all the journal entries that Cat should make

Prepare all the journal entries that Cat should make regarding this investment in Mouse for Years 4, 5 and on January 15, Year 6

  Prepare necessary adjusting entries relative to depreciation

Prepare any necessary adjusting entries relative to depreciation (use straight-line) and amortization (use effective-interest method) on December 31, 2015

  Treasury notified the agency that the invoice

Treasury notified the agency that the invoice was paid To prepare its quarterly financial statements, the agency took an inventory and found that $ 35,000 of the materials were still on hand.

  Columbia sportswear and under armour

Refer to the financial information for Columbia Sportswear and Under Armour reproduced at the back of the book for the information needed to answer the following questions.

  Customer complaints and returns of a dvd

The Aurora Electronics Company has been receiving a lot of customer complaints and returns of a DVD player that it manufactures. When a DVD is pushed into the loading mechanism

  Scherer corporation is preparing a bid for a special order

scherer corporation is preparing a bid for a special order that would require 720 liters of material u48n. the company

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd