yalo

For calculating after-tax cf (NOI - Annual Debt Service - Tax payable = After-tax CF)
how would you calculate the debt service to get the after-tax CF?



Kalo1: You would get the interest payment by first finding out the interest expense on each month then subracting the monthly payment to get the amount that will go into your principal (which would be a much smaller number than the interest expense at the beginning).

Then subtract the principal paid portion from the loan. Now you have your lowered principal. With that you multiple the interest for month two from the lowered principal (the 2nd month interest would be lower than the first as it is from a lowered principal amt).

Now you have the 2nd month interest payment and subtract that from your monthly payment of 2,889.20 to get the amount that will go into lowering your principal. repeat the process for month 3 to 12. Then you'll get your interest paid for the year. It is very unlikely that the test will ask you to caculate this.. maybe to the 2nd or 3rd month (if it is asking for monthly after tax cf, or 2nd, 3rd year if asking for yearly after-tax cf).