HP 12c Platinum - Page 18

18 Real Estate
12c platinum / 12C
RPN Keystrokes
12c platinum
ALG Keystrokes
Display Comments
3291.75?3 3291.75?3
3,291.75
1st year operating cost.
75000?4 75000?4
75,000.00
Depreciable value.
20?5 20?5
20.00
Useful life.
125?6 125?6
125.00
Declining balance factor.
35?7 35?7
35.00
Marginal Tax Rate.
6?8 6?8
6.00
Potential Gross Income
growth rate.
2.5?9 2.5?9
2.50
Operating cost growth.
5?.0 5?.0
5.00
Vacancy rate.
t t
1.00
Year 1
-1,020.88
A
TC
F
1
t t
2.00
Year 2
-822.59
A
TC
F
2
t t
3.00
Year 3
-598.85
A
TC
F
3
t t
4.00
Year 4
-348.94
A
TC
F
4
t t
5.00
Year 5
-72.16
A
TC
F
5
t t
6.00
Year 6
232.35
A
TC
F
6
t t
7.00
Year 7
565.48
A
TC
F
7
t t
8.00
Year 8
928.23
A
TC
F
8
t t
9.00
Year 9
1,321.62
A
TC
F
9
t t
10.00
Year 10
1,746.81
A
TC
F
10
Example 2: An office building was purchased for $1,400,000. The value of depreciable
improvements is $1,200,000 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 $175,200 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?