An investment opportunity having a market price

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An investment opportunity having a market price of $1,000,000 is available. You could obtain a $750,000, 25-year mortgage loan requiring equal monthly payments with interest at 7.0 percent. The following operating results are expected during the first year.

Effective gross income ........... $200,000
Less operating expenses and CAPX ......... $100,000
Net operating income ............. $100,000

For the first year only, determine the:

a. Gross income multiplier
b. Operating expense ratio (including CAPX) 
c. Monthly and annual payment
d. Debt coverage ratio 
e. Overall capitalization rate 
f. Equity dividend rate

Reference no: EM13990482

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