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Input Cells Formula Cells Description Cells

NOSHOW

DCF Analysis Input Sheet -4/8/2008 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 Dollar Amount $3,200,000
8
9
Assessed/Appraised Value of Improvements
Assessed/Appraised Value of Personal Property
Dollar Amount $1,800,000

10
11
Useful Life of Improvements (Years)
Useful Life of Personal Property (Years)
Non-Residential (Commercial) 39.0

12 Acquisition Price $1,000,000

13 Acquisition Costs
Dollar Amount
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
16
Potential Rental Income
Other Income (Collectable)
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%

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
21
Loan Amount
Interest Rate
Dollar Amount 7.50%
22 Amortization Period (Years) 20
23 Loan Term (Years) 20
24 Payments Per Year Twelve 12 12
25 Loan Costs
Percent of Loan Amount
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
Percent of Disposition Price 3.50%

1
1
1
1
1
 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 April 8, 2008

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

CALCULATION OF SALE PROCEEDS

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

CALCULATION OF ADJUSTED BASIS

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

CALCULATION OF CAPITAL GAIN ON SALE

12 Sale Price $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
13 -Costs of Sale $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
14 -Adjusted Basis at Sale (Line 5) $0 $0 $0 $0 $0 $0 $0 $0 $0 $542,332
15 -
16 =Gain or (Loss) $0 $0 $0 $0 $0 $0 $0 $0 $0 ($542,332)
17 -Straight Line Cost Recovery (limited to gain) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
18 -Suspended Losses $0
19 =Capital Gain from Appreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

ITEMS TAXED AS ORDINARY INCOME

20 Unamortized Loan Fees/Costs (negative) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
21 +
22 =Ordinary Taxable Income $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

CALCULATION OF SALE PROCEEDS

23 Sale Price $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
24 Cost of Sale $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
25 -Participaiton Payments on Sale $0
26 -Mortgage Balance(s) $0 $0 $0 $0 $0 $0 $0 $0 $0
27 +Balance of Funded Reserves $0
28 =SALE PROCEEDS BEFORE TAX $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
29 -Tax (Savings)on Ordinary Income (Line 22 x 35%) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
30 -Tax on Cost Recovery Recapture (Line 17 x 25%) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
31 -Tax on Capital Gain (Line 19 x 15%) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
32 =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 April 8, 2008

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

CALCULATION OF SALE PROCEEDS

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

CALCULATION OF ADJUSTED BASIS

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

CALCULATION OF CAPITAL GAIN ON SALE

12 Sale Price $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
13 -Costs of Sale $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
14 -Adjusted Basis at Sale (Line 5) $0 $0 $0 $0 $0 $0 $0 $0 $0 $542,332
15 -
16 =Gain or (Loss) $0 $0 $0 $0 $0 $0 $0 $0 $0 ($542,332)
17 -Straight Line Cost Recovery (limited to gain) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
18 -Suspended Losses $0
19 =Capital Gain from Appreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

ITEMS TAXED AS ORDINARY INCOME

20 Unamortized Loan Fees/Costs (negative) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
21 +
22 =Ordinary Taxable Income $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

CALCULATION OF SALE PROCEEDS

23 Sale Price $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
24 Cost of Sale $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
25 -Participaiton Payments on Sale $0
26 -Mortgage Balance(s) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
27 +Balance of Funded Reserves $0
28 =SALE PROCEEDS BEFORE TAX $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
29 -Tax (Savings)on Ordinary Income (Line 22 x 35%) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
30 -Tax on Cost Recovery Recapture (Line 17 x 25%) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
31 -Tax on Capital Gain (Line 19 x 15%) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
32 =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)

#VALUE!

Relationship Between Cost of Funds and Prorperty Yield

Cost of Funds
Before Tax #VALUE!
After Tax #VALUE!

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

#VALUE! Before Tax Cost = #VALUE!

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

x 65.00% = #VALUE!

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) ($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 Accumulation

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

al 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 Accumulation

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

al 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%