Information text Use the following information for questions 29– 34, each question is worth_________. Before attempting to answerthe questions, set up an analysis based on the given information.Chilly Cloud Corporation (C3) operates several informationtechnology hubs, including cloud storage, disaster recovery, andracks for lease to businesses needing additional space for theirown IT needs. C3 is growing rapidly and anticipates adding 20,000SF per year for the next five years. C3’s CFO, Dave, is analyzingseveral options for acquiring the expected space over the next fiveyears. There are many options; first, they could build a newbuilding to add the expected space needed, second, they could builda new corporate office which would include the existing corporateneeds as well as the expected space anticipated to be needed. Bothof these options could be expanded to buying and renovatingexisting buildings. In addition, C3 has the option to leaseproperty in increments that enable them to move into the neededspace as the growth occurs. The rates will vary according to whenand for how long they decide to lease. Also, the location couldvary if it is financially advantageous and not disruptive to theoperation. They also have an option to build to suit on one of thesites that are also available for construction of an ownedbuilding. C3 currently occupies 80,000 square feet in a buildingthey own. There is no space available to expand, so in everyoption, C3 must dispose of the existing property or operate frommultiple locations. The expected market value of the existingproperty is $7.2 million. The basis in the property is $2.7 millionand C3 is in a 21% tax bracket. C3 wants Class A property as partof the brand they are projecting. Construction rates are between$85-115 per square foot, including property, to build before tenantfinishes above standard. Lease rates are between $21-27 per squarefoot to lease, again at standard finishes. C3 estimates that theywill spend $1.25-1.5 million on upgrades or tenant finishes in anyscenario. Assuming a five-year horizon, answer the followingquestions with the information provided. Do not forget the taxeffect on the cashflow of periodic rent and mortgage payments whencalculating present values.

Question 29 Given the facts above and that the expected sellingexpenses would be 8% of the selling price; what is the expected netcash from sale? Select one: a. $6.624.000 b. $3,924,000 c.$5,799,960 d. $6,375,960 e. None of the above

Question 30 Assuming a weighted average cost of capital of 23%,what is the present value of the after-tax cash flow required,exclusive of the tenant improvements, on a five-year lease for180,000 square feet (projected total required over five-yearperiod) at a rate of $22.50 per square foot annually? Assumepayments are made monthly. Select one: a. $8,969,713. b. $9,457,983c. $15,997,500 d. $7,192,825 e. None of the above

Question 31 Answer saved Points out of 5.0 Flag questionQuestion text Assume C3 has the opportunity to execute a lease withoptions to add 20,000 SF over each of the next four years; however,to do that they would have to agree to bumps in rent of $.75 per SFannual rent on the entire leased space. Assuming no additionalmoving costs or other logistical issues, how much would they savein gross rent? Select one: a. $3,300,000 b. $2,718,655 c.$2,514,560 d. $6,020,661 e. None of the above

Question 32 Answer saved Points out of 5.0 Flag questionQuestion text Assume the WACC is 23% and payments are made monthly.What is the present value of the after-tax cash flow required forthe modified lease option with incremental increase in space andrent describe in the question above? Select one: a. $7,192,825 b.$7,310,243 c. $8,839,506 d. $6.020.661 e. None of the above

Question 33 Answer saved Points out of 5.0 Flag questionQuestion text If C3 elects to build, using the median constructioncost estimate ($100/SF), compute the net present value assuming thebuilding will be occupied simultaneously to the sale of theexisting building in one year. Include the cost of a constructionloan at 6.5% annual interest rate, with construction drawscommencing in 3 months and being incurred evenly over the remaining9 months. Assume the construction loan agreement requires C3 to putthe first 25% estimated construction costs into the project beforethe draws can be made and interest to be rolled into the loanmonthly. Assume C3 expects to convert the 75% construction loaninto a five-year term loan with monthly payment of principal andinterest amortized over 20 years at 6.5%. Assume a sale at the endof five years at a compound 3% increase in value. Depreciation onthe building is calculated at 39 years and selling costs areestimated to be 8%. C3 intends to withdraw the equity paid fromoperating cashflow from the proceeds of the sale and net thebalance against the required loan. What is the net present value ofthe of cash flows for the acquisition/construction of the building?Select one: a. $5,682,854 b. $7,192,825 c. $6,020,661 d. $8,544,415e. None of the above

Question 34 Answer saved Points out of 5.0 Flag questionQuestion text Using the information above, including the previousquestion, what is the present value of the sale of the newbuilding, discounted at the WACC (23%), assuming it occurs at theand of the fifth year. Select one: a. $5,799,960 b. $6,020,661 c.$2,944,941 d. $2,827,835 e. None of the above