Norway-Florida Fund Assumptions Page

This is the assumption set used to prepare the Norway-Florida Fund Analysis

Investment Assumptions
Price of Property $915,000
Closing Costs 2% of Property Price
Date of Acquisition 1 June 2010
Holding Period 7 Years
Inflation Rate 1% per Year
Sale Price Method Sale Price = $2,000,545
Selling Costs 8%
Investor's Assumptions
General Vacancy & Credit Loss Zero
Tax Rate - First Year 35%
Tax Rate - Following Years 35%
Capital Gain Rate 15%
Cost Recovery Recapture Rate 25% - Losses Carried Forward
Present Value Discount Rate Before Debt 12% per Year
Present Value Discount Rate Before Tax 12% per Year
Present Value Discount Rate After Tax 12% per Year
Depreciation Assumptions
Depreciable Amount 85% of Property Price
Depreciable Life 27.5 Years
Depreciation Method Straight Line
Depreciation Start Date at Acquisition
Loan Assumptions
Loan Amount 50% of Property Price
Loan Interest Rate 7% Annually
Original Loan Period 30 Years
Loan Origination Date at Acquisition
Loan Type Monthly Payments, Interest Only
Revenue Assumptions
Annual Revenue (1 Units @ $8,400.00/Unit/Month) $100,800.00
Revenue Start Date 1 September 2010
Revenue Period Until Projected Sale
Revenue Growth Method Annual at the Inflation Rate
Management Fee 11%
Vacancy Factor 8%
All Non-Management Expenses Expense as % of EI Assumptions
Expense Percentage 40% of Effective Income
Expense Start Date at Acquisition
Expense Period Until Projected Sale
Risk Analysis Proforma Income Statement Assumptions Page
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