The NOI for a small income property is expected to be $150,000 at the end of the first year. Financing will be based on a 1.2 DCR (debt coverage ratio) applied to the end of first year NOI, will have a 10 percent interest rate, and will be amortized over 20 years with monthly payments. The NOI will increase 3 percent per year after the first year. The investor expects to hold the property for five years. The resale price is estimated by applying a 9 percent terminal capitalization rate to the sixth-year NOI. Investors require a 12 percent rate of return on equity (equity yield rate) for this type of property

(a) What is the present value of the equity interest in the property?

(b) What is the total present value of the property (mortgage (debt) and equity)?

Please show your calculations