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Question 16 1 pts Comprehensive Module 02 Problem A (6 of 8): You are interested...

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Question 16 1 pts Comprehensive Module 02 Problem A (6 of 8): You are interested in buying an apartment complex in Starkville. You can acquire the complex for $3,000,000, and current mortgage terms for like properties are 80% L/V 25 year FRM with an 8.1% interest rate. You expect NOI to be $650,000 in year one, and to increase by 4% in each of the next two years. You have a marginal tax rate of 40%. The land is valued at $750,000, leaving a depreciable basis of $2,250,000 that will be depreciated on a straight-line basis for 27.5 years (assume there will be 12 full months of depreciation in year one). You require a 15% cost of capital. What is the after-tax cash flow in Year 3? Year 1 - 650,000 - 224,194 - 149,965 = 275,841 Year 2 = 669,500 - 224,194 - 161,405 = 290,401 Year 3 = ? 295,878 298,787 302,487 305,497

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