4.Assume you are considering investing in an apartment building with the following estimated financial characteristics:

§ Net operating income (NOI) = $60,000.

§ Net operating income growth rate = 5 percent per year.

§ Tax depreciation = $10,000 per year.

§ Annual interest expense = $9,000.

§ Annual debt service expense = $12,000.

§ Equity investors marginal income tax rate = 36 percent.

§ Investment horizon = four years.

The year-2 and year-3 cash flow after taxes is closest to:

A)   CFAT₂ = $31,600 and CFAT₃ = $33,400.

B)   CFAT₂ = $33,240 and CFAT₃ = $37,176.

C)   CFAT₂ = $35,160 and CFAT₃ = $37,176.

D)   CFAT₂ = $31,600 and CFAT₃ = $39,293.

答案和详解如下：

4.Assume you are considering investing in an apartment building with the following estimated financial characteristics:

§ Net operating income (NOI) = $60,000.

§ Net operating income growth rate = 5 percent per year.

§ Tax depreciation = $10,000 per year.

§ Annual interest expense = $9,000.

§ Annual debt service expense = $12,000.

§ Equity investors marginal income tax rate = 36 percent.

§ Investment horizon = four years.

The year-2 and year-3 cash flow after taxes is closest to:

A)   CFAT₂ = $31,600 and CFAT₃ = $33,400.

B)   CFAT₂ = $33,240 and CFAT₃ = $37,176.

C)   CFAT₂ = $35,160 and CFAT₃ = $37,176.

D)   CFAT₂ = $31,600 and CFAT₃ = $39,293.

The correct answer was C)

Taxes Payable Computation:
	Year-1	Year-2	Year-3	Year-4
NOI (g = 5%)	$60,000	$63,000	$66,150	$69,458
Less depreciation	(10,000)	(10,000)	(10,000)	(10,000)
Less interest	(9,000)	(9,000)	(9,000)	(9,000)
Taxable income	41,000	44,000	47,150	50,458
times tax rate	€0.36	0.36	0.36	0.36
Income taxes payable	$14,760	$15,840	$16,974	$18,165
CFATt Computation:
	Year-1	Year-2	Year-3	Year-3
NOI (g = 5%)	$60,000	$63,000	$66,150	$69,458
Less debt service	(12,000)	(12,000)	(12,000)	(12,000)
Before tax cash flow	$48,000	$51,000	$54,150	$57,458
Less taxes payable	(14,760)	(15,840)	(16,974)	(18,165)
CFAT	$33,240	$35,160	$37,176	$39,293