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Five Year Discounted Cash Flow,Property is 5,000 square feet,Rent is $20 per square foot and increases...

Five Year Discounted Cash Flow,Property is 5,000 square feet,Rent is $20 per square foot and increases $2 per annum,Vacancy and Collection is 5% of PGI,Real Estate Taxes are $20,000 in year 1 and increase 5% per annum,Operating Expenses are $25,000 in year 1 and increases $1 per square foot per annum,Management is 5% of EGI, Discount Rate is 11%,Capitalization Rate is 9%,Calculate the NPV.

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Expert Solution

fomulas used :-

year rent Vancancy and collection TAXES operating expences management net cashflow
1 =5000*20 =C4*5% 20000 25000 =(C4-D4-E4-F4)*5% =C4-D4-E4-F4-G4
2 =C4+10000 =C5*5% =E4*1.05 =F4+5000 =(C5-D5-E5-F5)*5% =C5-D5-E5-F5-G5
3 =C5+10000 =C6*5% =E5*1.05 =F5+5000 =(C6-D6-E6-F6)*5% =C6-D6-E6-F6-G6
4 =C6+10000 =C7*5% =E6*1.05 =F6+5000 =(C7-D7-E7-F7)*5% =C7-D7-E7-F7-G7
5 =C7+10000 =C8*5% =E7*1.05 =F7+5000 =(C8-D8-E8-F8)*5% =C8-D8-E8-F8-G8
NPV =NPV(11%,H4:H8)

jeff jeffy answered 2 years ago
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