Pro forma showing net operating cash flows

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Reference no: EM133756257

Question 1. Using the Year 1 property-level cash flow, compute the loan amount that will be available for this project given the required LTV, DSCR, DYR, and LTCR. What is the required amount of equity financing given the available debt financing and the loan's annual debt service, LTV, DYR, and DSCR? (20 points)

Question 2. Using the year 1 cash flow, compute the investment's effective gross income multiplier (EGIM), operating expense ratio (OER), debt coverage ratio (DCR), cash-on-cash (COC) return, and debt yield ratio (DYR). (10 points)

Question 3. Develop a 10-year pro forma showing net operating cash flows, before-tax operating cash flows, net sale price at the end of year 10, and before-tax equity reversion. (35 points)

Question 4. Using the DCF method, compute the project's unlevered and levered NPV if the unleveled and levered discount rates are 10% and 15%, respectively - it is assumed that the entire investment takes place at the beginning of Year 1. Should the develop go ahead with this project? (14 points)

Question 5. Use the DCF method to compute the project's expected 10-year unleveled and levered equity returns? (6 points)

Question 6. The previous unlevered and levered returns correspond to the base case scenario. What will be the project's unlevered and levered returns under the following best-case scenario of 6% exit cap rate, everything else unchanged, and under the worst-case scenario of 0% residential and residential rent growth and 10% retail vacancy, everything else unchanged? (10 points)

Question 7. Using the answers to question 6, compute the developer's expected unlevered and levered returns if the base, best, and worst case scenarios have a probability of 70%, 15%, and 15%, respectively. Should the developer do the project if her levered required return is 15%.

Reference no: EM133756257

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