Canvas Question 38 Use the following information to answer questions 38-50 Comme

Question

Canvas Question 38 Use the following information to answer questions 38-50 Commercial Property Leasable Space = 300,000 sq ft Cap Expenditures -20% of EGI Average Annual Rent $17.00/sq ft LTV ·80% 6% Loan Interest Rate Amortization %Bldg/Total Value-75% 2.5%/year Average Annual Rent Grwth V&C; Losses Operating Expenses Miscellaneous Income MI Annual Growth =8% of PGI -30 yrs -35% of EGI Corporate Tax Rate-30% Cap Gains Tax Rate-15% Accum Dep Tax Rate 25% Years of Ownership 5 years Purchase Price $22.5M , -$1.50/sq ft Going-out Cap Rate Discount Rate Selling Expenses 2%/ year 10.5% 10%

Explanation / Answer

40 Answer :- The amount of Depreciation recapture due the government upon the salend of property is $570,865

42 Answer :- The after tax equity reversion from the sale of the property is $15,227,438

43 Answer :- The year 1 debt coverage ratio is 2.72

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