Continuing from this question, can you help show the workings of question 2.2? Assuming a discount rate of 11%, calculate the NPV of Mortgage B, including the completion of the amortization table and calculation of PMT.
Mortgage A: 10% 8% 40% 5%
Mortgage B: 11% 8% 50% 5%
Levered cost of equity:
Unlevered cost of equity:
Loan-to-value ratio:
Cost of debt:
Mortgage B:
Rent income:
Interest expense:
Capital repayment of loan:
Selling price:
Cash flow:
Year 1
Year 2
Year 3
Year 4
Year 5
0 0
0 0
0 0
0 0
0
0
0
0
0
0
Applicable discount rate:
Present value:
Initial investment (enter as negative):
Net present value:
0
0
Mortgage B: Amortization table
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
AMORT
INT
PMT
BAL
0 0
0
0 0 0 0
0
0 0
0
0
Calculation of PMT:
Interest rate (rate):
Number of periods (nper):
0