Everything in Level 2, plus selling costs netted out of the reversion and a lender participation (kicker) that shares in the income and/or the reversion · solve for Ve.
The Assignment
Step 1Size the Debt — Payment, Debt Service & Payoff
The loan terms are given. Find the periodic payment, annualize it to debt service, and find the balance still owed at the end of the holding period (it gets paid off at sale).
Rounding convention for this grid: round every dollar line to the nearest whole dollar; grow NOI off the Year 1 base using compounding; debt service is constant; the lender’s participation (kicker) is taken as a percentage of NOI and/or of the equity reversion; the reversion capitalizes the Year 6 NOI at Rn, then nets out selling costs and the loan payoff; show discount factors to 4 decimals. PV of each year = equity cash flow × the 4-decimal factor. Year 6 is the reversion basis only — it is not discounted on its own.
Step 2Your Equity Cash Flow Model
Adjusted inputs in use. This table and the indicated value reflect your sensitivity changes — not the original problem shown above. Reset in the Sensitivity panel, or start a New Problem, to restore.
Explanation style:
changes how each solved cell’s hover (and the Help steps) explain the math — including the loan above
Indicated Equity Value (Ve = sum of present values of each equity cash flow) at
13% equity yield rate:adjusted inputs—