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 1 year ago

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