QUESTION 19 Ann purchased a property for $1,000,000. She bought the property at a 7.00% cap rate. She finances the purchase with an Interest Only senior loan at 60% LTV at an interest rate of 4.00%. She also decides to get subordinate / mezzanine financing for 20% of the capital stack (from 60%-80% LTV) at 8.00% interest only. What is Ann's return on equity (ROE) in year 1?
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- Bob buys a property that costs $1,000,000. The property is projected to generate NOI as follows: Year NOI 1 $100,000 2 $105,000 3 $110,000 Bob will own the property for two years. Bob will sell the property at the end of year 2 at a cap rate that is 250 basis points lower than the cap rate at which he bought the property. Assume Bob finances his purchase with a 50% LTV Fixed Rate IO loan at an annual rate of 5% with annual compounding and annual payments. What is Bob’s annualized IRR for the investment in question? A. 83.54% B. 52.38% C. 78.93% D. 79.71%DorisWade purchased a condominium for $50,000 in 1987. Her down payment was $20,000. She financed the remaining amount as a $30,000, 30-year mortgage at 7%, compounded monthly. Her monthly payments are $200. It is now 2007 (20 years later) and Doris has sold the condominium for $100,000, immediately aftermaking her 240th payment on the unit. Her effective annual internal rate of return on this investment is closest to which answer below? (a) 3.6% (b) 8.5% (c) 5.3% (d) 1.5%B 1. Ms. Smith agreed to purchase a property for $400,000 under the following terms: 80 percent loan-to-value ratio, 7 percent annual interest, and a 20-year loan term with monthly payments. Show your answers to the following two questions using your CCIM excel calculator. a. What would be Ms. Smith’s outstanding loan balance at the end of year three? b. What would be the outstanding balance if the interest rate were 3 percent in the above scenario?
- Topic : Simple Interest vs. Compound InterestScenario 1John and Mary, both Finance students at The University of the West Indies, need USD$12,500.00 each to fund their studies. At First Bank, John borrows USD$12,500.00 at 12% per annum for 3 years at Simple Interest and Mary borrows the same amount at the GCU Credit Union for the same period at 10% per annum, compounded annually. 1. Who pays more interest and by how much?2. Which option would you choose and why?pts You recently bought a single-family investment property for $276,000 with a fixed interest rate mortgage loan with an initial balance of $125,000, 3.55% annual nominal interest rate, and a 10-year fully amortizing loan term. Cash flow after debt service and before tax is estimated to be as follows: Year 1: $6,500 Year 2: $6,750 Year 3: $7,000 You expect a three-year holding period and that you'll be able to sell the investment for $300,000 three years from today. What do you estimate for the leveraged before tax IRR and how IRR is partitioned between cash flow from operations and cash flow from the sale? Use annual compounding or discounting to solve this problem. 5.20% with cash flow from operations representing 6.63% and cash flow from the sale representing 93.37% 5.20% with cash flow from operations representing 93.37% and cash flow from the sale representing 6.63% 15.29% with cash flow from operations representing 10.12% and cash flow from the sale representing 89.88% 15.29%…B. Art purchase a house and lot worth ₱1,410,000, he made a down payment of ₱150, 000 and the remaining is through bank loan. He was approved for a 20-year mortgage with a rate of 5%. Determine the monthly payment of Art.
- 10.2 Samuel was offered two options for a car she was purchasing: Lease option: Pay lease amounts of $550 at the beginning of every month for 5 years. At the the end of 5 years, purchase the car for $12,500. Buy option: Purchase the car immediately for $29,000. The money is worth 7.10% compounded monthly. a. What is the Discounted Cash Flow (DCF) for the lease option? b. Which is the better option? Lease Option Buy Option Kindly do the precedure with all the decimals DO OT ROUNDD4) Bob buys a property that costs $1,000,000. The property is projected to generate NOI as follows: Year NOI 1 $100,000 2 $105,000 3 $110,000 Bob will own the property for two years. Bob will sell the property at the end of year 2 at a cap rate that is 250 basis points lower than the cap rate at which he bought the property. What is Bob’s annualized IRR for the investment in question A. 26.21% B. 14.89% C. 30.47% D. 27.78%21. Beth purchased a $50,000 nonparticipating whole life insurance policy. The annual premium was $1,278. The cash value of the policy after 10 years will be $13,740. The future value of $1 deposited at the start of the year for 10 years, assuming 5 percent interest, is $13.207. What is the surrender cost of this policy, per thousand per year, over the first 10 years the policy is in force? A) $4.48 B) $4.75 C) $4.92 D) $5.16
- On January 1 of year 1, Arthur and Aretha Franklin purchased a home for $1.98 million by paying $280,000 down and borrowing the remaining $1.70 million with a 5.4 percent loan secured by the home. The Franklins paid interest only on the loan for year 1, year 2, and year 3 (unless stated otherwise). (Enter your answers in dollars and not in millions of dollars. Do not round intermediate calculations. Leave no answer blank. Enter zero if applicable.) Problem 14-48 Part b (Algo) b. What is the amount of interest expense the Franklins may deduct in year 2 assuming year 1 is 2020?14. Loan amortization and capital recovery Ian loaned his friend $25,000 to start a new business. He considers this loan to be an investment, and therefore requires his friend to pay him an interest rate of 9% on the loan. He also expects his friend to pay back the loan over the next four years by making annual payments at the end of each year. Ian texted and asked that you help him calculate the annual payments that he should expect to receive so that he can recover his initial investment and earn the agreed-upon 9% on his investment. Calculate the annual payment and complete the following capital recovery schedule: Year Beginning Amount Payment Interest Paid Principal Paid Ending Balance 1 $25,000.00 2 3 4 -$0.01Alan Frost purchased a new split-level home for $170,000 with 20% down. He decided to use Victory Bank for his mortgage. They are offering 4.75% for 25-year mortgages. Provide Alan with a partial amortization schedule for just the first four months.