Assume that you were given an opportunity to purchase a rea

Assume that you were given an opportunity to purchase a real estate projectusing an equity participation loan. The NOI for each year of the holding periodare shown below:Year 1Year 2Year 3Year 4NOI124,787132,225139,954148,468Additional information:1) Purchase price = $1,900,0002) Estimated value of land = $500,0003) Anticipated mortgage terms:a) Loan to value ratio = .80b) Interest rate = 5.5%c) Years to maturity = 25d) Points charged = 3e) Prepayment penalty = 2% of outstanding balancef) Level payment, fully amortizedg) Fixed interest rate, monthly payments4) Participation terms:a) Share of NOI = 17.5% over $130,000b) Share of Appreciation = 20%5) Future sales price = $2,350,0006) Estimated selling expenses as proportion of future sales price = 5%7) Client’s minimum required before-tax rate of return on equity = 12%Calculate:The before-tax cash flows and the before-tax equity reversion (you donot need to calculate the after-tax cash flows or reversion).The before-tax net present value to the investor.