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Question: Using the discounted cash flow (DCF) valuation method, what is the maximum loan that can be made on a property with the following annual net before-tax cash flow, assuming an 11.5% discount rate and underwriting criteria that specify a maximum loan/value ratio of 70%? Cash flows: $1 million in Year 1, 1.1 million in Years 2 through 4, 1.5 million in Years 5 through 9, and $12 million in Year 10 including reversion.

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