125 | 6 | 125.00 | Decline in balance factor. |
|
| ||
35 | 7 | 35.00 | Marginal Tax Rate. |
|
| ||
6 | 8 | 6.00 | Potential Gross Income growth rate. |
|
| ||
2.5 | 9 | 2.50 | Operating cost growth. |
|
| ||
5 | .0 | 5.00 | Vacancy rate. |
|
| ||
|
| 1.00 | Year 1 |
|
| ATCF1 | |
|
| 2.00 | Year 2 |
|
| ATCF2 | |
|
| 3.00 | Year 3 |
|
| ATCF3 | |
|
| 4.00 | Year 4 |
|
| ATCF4 | |
|
| 5.00 | Year 5 |
|
| 232.35 | ATCF5 |
|
| 6.00 | Year 6 |
|
| 565.48 | ATCF6 |
|
| 7.00 | Year 7 |
|
| 928.23 | ATCF7 |
|
| 8.00 | Year 8 |
|
| 1,321.62 | ATCF8 |
|
| 9.00 | Year 9 |
|
| 1,746.81 | ATCF9 |
|
| 10.00 | Year 10 |
|
| ATCF10 |
Example 2: An office building was purchased for $1,400,000. The value of depreciable improvements is $1,200,000.00 with a 35 year economic life. Straight line depreciation will be used. The property is financed with a $1,050,000 loan. The terms of the loan are 9.5% interest and $9,173.81 monthly payments for 25 years. The office building generates a Potential Gross Income of $175,2000 which grows at a 3.5% annual rate. The operating cost is $40,296.00 with a 1.6% annual growth rate. Assuming a Marginal Tax Rate of 50% and a vacancy rate of 7%, what are the After- Tax Cash Flows for the first 5 years?
Keystrokes Display
CLEAR 
1050000 | 175,200.00 | Potential Gross Income. |
|
|
9173.81 
9.5 
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