Given the Following Information Regarding an Income Producing Property, Determine

question 31

Multiple Choice

Given the following information regarding an income producing property, determine the after tax net present value (NPV) . Expected Holding Period: 5 years; 1ˢᵗ year Expected BTCF: $30,656; 2ⁿᵈ year Expected BTCF: $33,329; 3ʳᵈ year Expected BTCF: $36,082; 4ᵗʰ year Expected BTCF: $38,918; 5ᵗʰ year Expected BTCF: $41,839; 1ˢᵗ year Expected Tax Liability: $7,645; 2ⁿᵈ year Expected Tax Liability: $8,658; 3ʳᵈ year Expected Tax Liability: $9,708; 4ᵗʰ year Expected Tax Liability: $10,798; 5ᵗʰ year Expected Tax Liability: $6,951; Estimated Before Tax Equity Reversion at end of year 5: $343,674; Expected Taxes Due on Sale at end of year 5: $32,032; Required equity investment: $241,163; After Tax Opportunity Cost: 11.2%

• A) -$40,858
• B) -$91,785
• C) $40,858
• D) $91,785

---

Definitions:

Singles

Individuals who are not married, in a civil partnership, or in a cohabiting relationship, often highlighting their state of being unmarried.

One-Parent Families

Households led by a single parent raising one or more children, due to various circumstances such as divorce, death, or single adoption.

Mother-Child Families

Family units consisting of a mother and her child or children, often referred to in the context of single-parent households.

Grandmother-Child Families

Family structures where grandchildren are raised by their grandmothers in the absence or limited involvement of the children's parents.