Legend

Input Cells Formula Cells Description Cells

NOSHOW

DCF Analysis Input Sheet -11/28/2017 Clear & Reset

Instructions :
Property Assumptions
1 Name Drug Store Tenant
2 Location Main and Main
3 Type of Property Retail
4 Purpose of Analysis Risk Analysis
5 Prepared By Scottsdale Analysts
6 Size (Square feet or Number of Units) 15,000
7 Assessed/Appraised Value of Land $3,200,000
8 Assessed/Appraised Value of Improvements $1,800,000
9 Assessed/Appraised Value of Personal Property
10 Useful Life of Improvements (Years) 39.0
11 Useful Life of Personal Property (Years)
12 Acquisition Price $1,000,000
13 Acquisition Costs

14 Potential Rental Income and Escalations Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11
15 Potential Rental Income Yr 1 total amount and annual % changes 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
16 Other Income (Collectable)

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11
17 Annual Vacancy Rates (Percent of Potential Rental Income) 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

18 Operating Expenses and Escalations Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11
19 Total Operating Expenses

Financing Assumptions 1st Mortgage 2nd Mortgage

20 Loan Amount
21 Interest Rate 7.50%
22 Amortization Period (Years) 20
23 Loan Term (Years) 20
24 Payments Per Year 12 12
25 Loan Costs

Investor/Owner Assumptions
26 Ordinary Income Marginal Tax Rate 35.00%
27 Capital Gains Tax Rate 15.00%
28 Cost Recovery Recapture Tax Rate 25.00%
29 Total Capital to Invest $5,000,000
30 After Tax Reinvestment Rates $0 To 5.00%
31 $0 To 5.00%
$0 And above 5.00%
31 Anticipated Holding Period (1 - 10 Years) 10
32 Disposition Price Cap Rate 7.50%
33 Disposition Cost of Sale 3.50%
 Note: Do not enter any information on this sheet.
All values are derived from Input Sheet.

Cash Flow Analysis Worksheet-Without Financing

Property Name Drug Store Tenant Acquisition Price $1,000,000
Location Main and Main Plus Acquisition Costs $0
Type of Property Retail Plus Loan Costs $0
Size of Property (sf/units) 15,000 Minus Mortgages $0
Purpose of Analysis Risk Analysis Equals Initial Investment $1,000,000
Prepared by Scottsdale Analysts
Date Prepared November 28, 2017

MORTGAGE DATA COST RECOVERY DATA BASIS DATA

1st Mortgage 2nd Mortgage Improvements Personal Property
Amount Value $1,800,000 $0 Acquisition Price $1,000,000
Interest Rate C. R. Method SL SL Acquisition Costs $0
Amortization Period Useful Life 39.0 0 Total Acquisition Basis $1,000,000
Loan Term In Service Date 1-Jan 1-Jan
Payments/Year Date of Sale 31-Dec 31-Dec
Periodic Payment 12 Months % age 2.564% 0.000%
Annual Debt Service 11.5 Months % age 2.457% 0.000%
Loan Fees/Costs

TAXABLE INCOME
End of Year 1 2 3 4 5 6 7 8 9 10 11
1 POTENTIAL RENTAL INCOME $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
2 -Vacancy & Credit Losses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
3 EFFECTIVE RENTAL INCOME $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
4 +Other Income (collectable) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
5 GROSS OPERATING INCOME $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
6 TOTAL OPERATING EXPENSES $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
7 NET OPERATING INCOME $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
8 -Interest-First Mortgage $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
9 -Interest-Second Mortgage $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
10 -Cost Recovery-Improvements $44,226 $46,152 $46,152 $46,152 $46,152 $46,152 $46,152 $46,152 $46,152 $44,226
11 -Cost Recovery-Personal Property $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
12 -Loan Costs Amortization $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
13 -
14 -
15 REAL ESTATE TAXABLE INCOME ($44,226) ($46,152) ($46,152) ($46,152) ($46,152) ($46,152) ($46,152) ($46,152) ($46,152) ($44,226)
16 Tax Liability (Savings) at 35% ($15,479) ($16,153) ($16,153) ($16,153) ($16,153) ($16,153) ($16,153) ($16,153) ($16,153) ($15,479)

CASH FLOW
17 NET OPERATING INCOME (LINE 8) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
18 -Annual Debt Service $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
19 -
20 -
21 -
22 CASH FLOW BEFORE TAXES $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
23 -Tax Liability (Savings) (Line 17 ) ($15,479) ($16,153) ($16,153) ($16,153) ($16,153) ($16,153) ($16,153) ($16,153) ($16,153) ($15,479)
24 CASH FLOW AFTER TAXES $15,479 $16,153 $16,153 $16,153 $16,153 $16,153 $16,153 $16,153 $16,153 $15,479
 Note: Do not enter any information on this sheet.
All values are derived from other sheets.

Cash Sale Worksheet-Without Financing

MORTGAGE BALANCES
End of Year: 1 2 3 4 5 6 7 8 9 10
Principal Balance - 1st Mortgage $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal Balance - 2nd Mortgage $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
TOTAL UNPAID BALANCE $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

CALCULATION OF SALE PROCEEDS

END OF YEAR 1 2 3 4 5 6 7 8 9 10
PROJECTED SALES PRICE (Rounded to nearest 000) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

CALCULATION OF ADJUSTED BASIS

Basis at Acquisition $0 $0 $0 $0 $0 $0 $0 $0 $0 $1,000,000
+Capital Additions $0
-Cost Recovery (Depreciation) Taken $0 $0 $0 $0 $0 $0 $0 $0 $0 $457,668
-Basis in Partial Sales $0
=Adjusted Basis at Sale $0 $0 $0 $0 $0 $0 $0 $0 $0 $542,332

CALCULATION OF CAPITAL GAIN ON SALE

Sale Price $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
-Costs of Sale $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
-Adjusted Basis at Sale (Line 5) $0 $0 $0 $0 $0 $0 $0 $0 $0 $542,332
-
=Gain or (Loss) $0 $0 $0 $0 $0 $0 $0 $0 $0 ($542,332)
-Straight Line Cost Recovery (limited to gain) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
-Suspended Losses $0
=Capital Gain from Appreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

ITEMS TAXED AS ORDINARY INCOME

Unamortized Loan Fees/Costs (negative) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
+
=Ordinary Taxable Income $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

CALCULATION OF SALE PROCEEDS

Sale Price $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Cost of Sale $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
-Participaiton Payments on Sale $0
-Mortgage Balance(s) $0 $0 $0 $0 $0 $0 $0 $0 $0
+Balance of Funded Reserves $0
=SALE PROCEEDS BEFORE TAX $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
-Tax (Savings)on Ordinary Income (Line 22 x 35%) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
-Tax on Cost Recovery Recapture (Line 17 x 25%) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
-Tax on Capital Gain (Line 19 x 15%) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
=SALE PROCEEDS AFTER TAX $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
 Legend

Input Cells Formula Cells Description Cells

NPV And IRR-Without Financing

Before Tax After Tax
EOY $ EOY $
0 ($1,000,000) 0 ($1,000,000)
1 $0 $0 1 $15,479 $0
2 $0 $0 2 $16,153 $0
3 $0 $0 3 $16,153 $0
4 $0 $0 4 $16,153 $0
5 $0 $0 5 $16,153 $0
6 $0 $0 6 $16,153 $0
7 $0 $0 7 $16,153 $0
8 $0 $0 8 $16,153 $0
9 $0 $0 9 $16,153 $0
10 $0 + $0 10 $15,479 + $0

IRR = Err:523 IRR = Err:523

NPV @ Err:523 = Err:523 NPV @ Err:523 = Err:523
0 0

O ($1,000,000) O ($1,000,000)
1 $0 1 $15,479
2 $0 2 $16,153
3 $0 3 $16,153
4 $0 4 $16,153
5 $0 5 $16,153
6 $0 6 $16,153
7 $0 7 $16,153
8 $0 8 $16,153
9 $0 9 $16,153
10 $0 10 $15,479
 Note: Do not enter any information on this sheet.
All values are derived from other
sheets.

Cash Flow Analysis Worksheet-With Financing

Property Name Drug Store Tenant Acquisition Price $1,000,000
Location Main and Main Plus Acquisition Costs $0
Type of Property Retail Plus Loan Costs $0
Size of Property (sf/units) 15,000 Minus Mortgages $0
Purpose of Analysis Risk Analysis Equals Initial Investment $1,000,000
Prepared by Scottsdale Analysts
Date Prepared November 28, 2017

MORTGAGE DATA COST RECOVERY DATA BASIS DATA

1st Mortgage 2nd Mortgage Improvements Personal Property
Amount $0 $0 Value $1,800,000 $0 Acquisition Price $1,000,000
Interest Rate 7.50% 0.00% C. R. Method SL SL Acquisition Costs $0
Amortization Period 20 0 Useful Life 39.0 0 Total Acquisition Basis $1,000,000
Loan Term 20 0 In Service Date 1-Jan 1-Jan
Payments/Year 12 12 Date of Sale 31-Dec 31-Dec
Periodic Payment $0.00 $0.00 12 Months % age 2.564% 0.000%
Annual Debt Service $0 $0 11.5 Months % age 2.457% 0.000%
Loan Fees/Costs $0 $0

TAXABLE INCOME
End of Year 1 2 3 4 5 6 7 8 9 10 11
1 POTENTIAL RENTAL INCOME $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
2 -Vacancy & Credit Losses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
3 EFFECTIVE RENTAL INCOME $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
4 +Other Income (collectable) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
5 GROSS OPERATING INCOME $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
6 TOTAL OPERATING EXPENSES $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
7 NET OPERATING INCOME $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
8 -Interest-First Mortgage $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
9 -Interest-Second Mortgage $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
10 -Cost Recovery-Improvements $44,226 $46,152 $46,152 $46,152 $46,152 $46,152 $46,152 $46,152 $46,152 $44,226
11 -Cost Recovery-Personal Property $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
12 -Loan Costs Amortization $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
13 -
14 -
15 REAL ESTATE TAXABLE INCOME ($44,226) ($46,152) ($46,152) ($46,152) ($46,152) ($46,152) ($46,152) ($46,152) ($46,152) ($44,226)
16 Tax Liability (Savings) at 35% ($15,479) ($16,153) ($16,153) ($16,153) ($16,153) ($16,153) ($16,153) ($16,153) ($16,153) ($15,479)

CASH FLOW
17 NET OPERATING INCOME (LINE 8) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
18 -Annual Debt Service $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
19 -
20 -
21 -
22 CASH FLOW BEFORE TAXES $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
23 -Tax Liability (Savings) (Line 17 ) ($15,479) ($16,153) ($16,153) ($16,153) ($16,153) ($16,153) ($16,153) ($16,153) ($16,153) ($15,479)
24 CASH FLOW AFTER TAXES $15,479 $16,153 $16,153 $16,153 $16,153 $16,153 $16,153 $16,153 $16,153 $15,479
 Note: Do not enter any information on this sheet.
All values are derived from other sheets.

Cash Sale Worksheet-With Financing

MORTGAGE BALANCES
End of Year: 1 2 3 4 5 6 7 8 9 10
Principal Balance - 1st Mortgage $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal Balance - 2nd Mortgage $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
TOTAL UNPAID BALANCE $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

CALCULATION OF SALE PROCEEDS

END OF YEAR 1 2 3 4 5 6 7 8 9 10
PROJECTED SALES PRICE (Rounded to nearest 000) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

CALCULATION OF ADJUSTED BASIS

Basis at Acquisition $0 $0 $0 $0 $0 $0 $0 $0 $0 $1,000,000
+Capital Additions $0
-Cost Recovery (Depreciation) Taken $0 $0 $0 $0 $0 $0 $0 $0 $0 $457,668
-Basis in Partial Sales $0
=Adjusted Basis at Sale $0 $0 $0 $0 $0 $0 $0 $0 $0 $542,332

CALCULATION OF CAPITAL GAIN ON SALE

Sale Price $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
-Costs of Sale $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
-Adjusted Basis at Sale (Line 5) $0 $0 $0 $0 $0 $0 $0 $0 $0 $542,332
-
=Gain or (Loss) $0 $0 $0 $0 $0 $0 $0 $0 $0 ($542,332)
-Straight Line Cost Recovery (limited to gain) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
-Suspended Losses $0
=Capital Gain from Appreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

ITEMS TAXED AS ORDINARY INCOME

Unamortized Loan Fees/Costs (negative) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
+
=Ordinary Taxable Income $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

CALCULATION OF SALE PROCEEDS

Sale Price $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Cost of Sale $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
-Participaiton Payments on Sale $0
-Mortgage Balance(s) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
+Balance of Funded Reserves $0
=SALE PROCEEDS BEFORE TAX $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
-Tax (Savings)on Ordinary Income (Line 22 x 35%) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
-Tax on Cost Recovery Recapture (Line 17 x 25%) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
-Tax on Capital Gain (Line 19 x 15%) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
=SALE PROCEEDS AFTER TAX $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
 Legend

Input Cells Formula Cells Description Cells

NPV And IRR-With Financing

Before Tax After Tax
EOY $ EOY $
0 ($1,000,000) 0 ($1,000,000)
1 $0 $0 1 $15,479 $0
2 $0 $0 2 $16,153 $0
3 $0 $0 3 $16,153 $0
4 $0 $0 4 $16,153 $0
5 $0 $0 5 $16,153 $0
6 $0 $0 6 $16,153 $0
7 $0 $0 7 $16,153 $0
8 $0 $0 8 $16,153 $0
9 $0 $0 9 $16,153 $0
10 $0 + $0 10 $15,479 + $0

IRR = Err:523 IRR = Err:523

NPV @ Err:523 = Err:523 NPV @ Err:523 = Err:523
0 0

O ($1,000,000) O ($1,000,000)
1 $0 1 $15,479
2 $0 2 $16,153
3 $0 3 $16,153
4 $0 4 $16,153
5 $0 5 $16,153
6 $0 6 $16,153
7 $0 7 $16,153
8 $0 8 $16,153
9 $0 9 $16,153
10 $0 10 $15,479
 Note: Do not enter any information on this sheet.
All values are derived from other sheets.

Cost of Funds And Leverage Impact

Before and After Tax Cost of Funds
Loan Information Non-discounted Loan
Loan Amount $0 EOP $
Interest Rate 7.50% 0 $0
Amortization Period 20 1 $0.00
Payments Per Year 12
Discount Points $0
Projected Holding Period 10 120 $0.00 +

Before Tax Cost =

Before Tax Cost of Funds x (1-Tax Rate

120.00%

Relationship Between Cost of Funds and Prorperty Yield

Cost of Funds
Before Tax 120.00%
After Tax 78.00%

Effective Tax Rate and Yield Change

Mortgage
Portfolio
Before Tax Yield Err:523

After Tax Yield Err:523

Effective Tax Rate 35%

 enter any information on this sheet.
ues are derived from other sheets.

act

scounted Loan Discounted Loan

EOP $
0 $0
1 $0.00

$0 120 $0.00 + $0

120.00% Before Tax Cost = 120.00%

st of Funds x (1-Tax Rate) = After Tax Cost of Funds

x 65.00% = 78.00%

Prorperty Yield
Property Yield
Err:523 Err:523
Err:523 Err:523

Real Estate Real Estate

Without With
Financing Financing
Err:523 Err:523 Err:523

Err:523 Err:523 Err:523

Err:523 Err:523
 Note: Do not enter any information on this sheet.
All values are derived from other sheets.

Capital Accumulation Without Financing

Total Capital to Invest = $5,000,000

EOY $
0 ($1,000,000)

1 $15,479 $0
5.00%
2 $16,153 + $16,253 = $32,406
5.00%
3 $16,153 $0 + $34,027 =

4 $16,153 $0 +

5 $16,153 $0

6 $16,153 $0

7 $16,153 $0

8 $16,153 $0

9 $16,153 $0

10 $15,479 + $0

IRR = Err:523

Total Capital
$5,000,000
Invested

Annual After Tax Compound Growth Rate of Capita

($1,000,000)
$15,479
$16,153
$16,153
$16,153
$16,153
$16,153
$16,153
$16,153
$16,153
$15,479
not enter any information on this sheet.
alues are derived from other sheets.

ncing

($4,000,000) 5.00%

$50,180
5.00%
$52,689 = $68,842
5.00%
+ $72,284 = $88,437
5.00%
+ $92,859 = $109,012
5.00%
+ $114,463 = $130,616
5.00%
+ $137,147 =

Capital Acc

Capital
10 Years $6,717,032
Accumulation

nd Growth Rate of Capital 3.00%

 $6,515,579

$0

$0

$0

$0

$0

$0

$0

$153,300 $0
5.00%
$160,965 = $177,118 $0
5.00%
+ $185,974 = $201,453

Capital Accumulation = $6,717,032

 Note: Do not enter any information on this sheet.
All values are derived from other sheets.

Capital Accumulation With Financing

Total Capital to Invest = $5,000,000

EOY $
0 ($1,000,000) ($4,000,000)

1 $15,479 $0
5.00%
2 $16,153 + $16,253 = $32,406
5.00%
3 $16,153 $0 + $34,027 = $50,180
5.00%
4 $16,153 $0 + $52,689

5 $16,153 $0

6 $16,153 $0

7 $16,153 $0

8 $16,153 $0

9 $16,153 $0

10 $15,479 + $0

IRR = Err:523

Total Capital
$5,000,000
Invested

Annual After Tax Compound Growth Rate of Capita

($1,000,000)
$15,479
$16,153
$16,153
$16,153
$16,153
$16,153
$16,153
$16,153
$16,153
$15,479
ormation on this sheet.
ed from other sheets.

5.00%

= $68,842
5.00%
+ $72,284 = $88,437
5.00%
+ $92,859 = $109,012
5.00%
+ $114,463 = $130,616
5.00%
+ $137,147 = $153,300
5.00%
+ $160,965 =

Capital Accumulatio

Capital
10 Years $6,717,032
Accumulation

h Rate of Capital 3.00%

 $6,515,579

$0

$0

$0

$0

$0

$0

$0

$0

$177,118 $0
5.00%
$185,974 = $201,453

tal Accumulation = $6,717,032

 Note: Do not enter any information on this sheet.
All values are derived from other sheets.

Summary
Measures of Investment Performance

Without
Financing
Before Tax IRR Err:523
After Tax IRR Err:523
After Tax Capital Accumulation $6,717,032
After Tax Annual Growth Rate of Capital 3.00%
ation on this sheet.
om other sheets.

With
Financing
Err:523
Err:523
$6,717,032
3.00%