Interest are required during the construction period

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1. The NOI is $1,000,000, the debt service is $800,000 of which $700,000 is interest, the depreciation expense is $250,000. What is the after-tax cash flow to the equity investor if the income tax rate is 33%?

$183,500.

$182,500.

$195,000.

$650,000

2. Suppose a construction project anticipates the beginning-of-month draws of $400,000, $300,000, and $600,000 consecutively. What will be the balance owed at the end of the third month if the interest on the loan is 7% per annum (nominal annual rate, compounded monthly), and no payments of either principal or interest are required during the construction period?

a) $1,306,430.

b) $1,314,051.

c) $1,378,960.

d) Cannot be computed with the information given.

Reference no: EM131359946

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