Question: The NOI is $850,000, the debt service is $600,000 of which $550,000 is interest, the depreciation expense is $350,000, and the income tax rate is 35%.
a. What is the before-tax cash flow to the equity investor (EBTCF) if there are no capital improvement expenditures or reversion items this period?
b. What is the after-tax cash flow to the equity investor if the income tax rate is 35%?