Please solve the below problem in Excel
Question # 1
Property is 10,000 square feet
Rent is $20 per square foot and increases $2 per annum
Vacancy and Collection is 5% of PGI
Real Estate Taxes are $30,000 in year 1 and increase 5% per annum
Operating Expenses are $15,000 in year 1 and increase $2 per square foot per annum
Management is 5% of EGI
Discount Rate is 10%
Capitalization Rate is 8%
There is also a $500,000 mortgage in the property with an interest only rate of 7%.
Please calculate the net cash flows of the subject property for all years and assume that it is sold at the end of the 5th year.
Please calculate the Net Present Value (NPV) of the net cash flows generated by the property for years 1 thru 5 only. Use a 5th year reversion value
Please calculate the IRR of the investment assuming it is sold in the 5th year. The year 0 purchase price is $1,000,000