Given the following information, please calculate after tax cash flow for year 1. Assuming a sales price of $1,100,000,
Posted: Sun May 08, 2022 10:04 am
Given the following information, please calculate after tax cash
flow for year 1. Assuming a sales price of $1,100,000,
please calculate the after tax cash flow from the sale (don’t
forget the depreciation recapture.) Finally, calculate
the after tax IRR for the investment. Canvas will ask
you other questions in addition to these. So, calculate
all of this first, then proceed to the actual quiz
questions. They are given one at a time, each as a
separate quiz. Do not move on to the next question until
you have the current one correct. Since some of the
answers build on the previous question, there’s no point in moving
forward until you have the current question
correct. Notice that Quizzes 1-4 are one point, but Quiz
5 is 6 points with just one answer. There is no time
limit and there is no limit on the number of attempts.
Purchase Price: $900,000
Loan: $750,000, 5%, 25 years (annual payments)
Year 1 NOI: $100,000
Year 2 ATCF: $33,000
Year 3 ATCF: $34,000
Use an 85/15 ratio for depreciation. 39 year,
straight line.
35% tax rate on income, 15% on long term capital gains, 25%
depreciation recapture.
1. What is the annual depreciation expense?
2. What is the after tax cash flow (ATCF) for year 1?
3. What is the after tax cash flow from the sale at the end of
year 3?
4. What is the IRR of the investment?
flow for year 1. Assuming a sales price of $1,100,000,
please calculate the after tax cash flow from the sale (don’t
forget the depreciation recapture.) Finally, calculate
the after tax IRR for the investment. Canvas will ask
you other questions in addition to these. So, calculate
all of this first, then proceed to the actual quiz
questions. They are given one at a time, each as a
separate quiz. Do not move on to the next question until
you have the current one correct. Since some of the
answers build on the previous question, there’s no point in moving
forward until you have the current question
correct. Notice that Quizzes 1-4 are one point, but Quiz
5 is 6 points with just one answer. There is no time
limit and there is no limit on the number of attempts.
Purchase Price: $900,000
Loan: $750,000, 5%, 25 years (annual payments)
Year 1 NOI: $100,000
Year 2 ATCF: $33,000
Year 3 ATCF: $34,000
Use an 85/15 ratio for depreciation. 39 year,
straight line.
35% tax rate on income, 15% on long term capital gains, 25%
depreciation recapture.
1. What is the annual depreciation expense?
2. What is the after tax cash flow (ATCF) for year 1?
3. What is the after tax cash flow from the sale at the end of
year 3?
4. What is the IRR of the investment?