3. 3 You are an employee of a consultant company and have been given the following information to do an investment analysis of a new small income-producing property for sale to a potential investor. Asking Price $1,250,000 $160,000 2.50% 10% of rents 35% of EGI 3% Rent Year 1 Growth Rent Vacancy and Coll Loss Expenses Appreciation Rate Tax Considerations Building Value Depreciation Ordinary Income Tax Rate Capital Gains Tax Rate Depreciation Recapture Tax Rate LTV Loan Interest Loan Term Payments Per Year Holding Period $1,062,500 39 years 37% 20% 25% 70% 8% 30 years 12 5 years of sale 0% price 14% 12% 14% Selling Costs Equity Discount Rate After Tax Equity Discount Rate Reinvestment Rate 3. 3 You are an employee of a consultant company and have been given the following information to do an investment analysis of a new small income-producing property for sale to a potential investor. Asking Price $1,250,000 $160,000 2.50% 10% of rents 35% of EGI 3% Rent Year 1 Growth Rent Vacancy and Coll Loss Expenses Appreciation Rate Tax Considerations Building Value Depreciation Ordinary Income Tax Rate Capital Gains Tax Rate Depreciation Recapture Tax Rate LTV Loan Interest Loan Term Payments Per Year Holding Period $1,062,500 39 years 37% 20% 25% 70% 8% 30 years 12 5 years of sale 0% price 14% 12% 14% Selling Costs Equity Discount Rate After Tax Equity Discount Rate Reinvestment Rate