After-Tax Cash Flows - HP 12c Solutions Handbook

transaction costs are expected to be 7% of the resale price. The mortgage
is the same as that indicated in the preceding example.
• What will the Mortgage Balance be in 10 years?
• What are the Cash Proceeds of Resale and Net Cash Proceeds of
Resale?
Keystrokes
CLEAR
20
11.5
700000
10
800000
7

After-Tax Cash Flows

The After-Tax Cash Flow (ATCF) is found for the each year by deducting
the Income Tax Liability for that year from the Cash Throw Off.
where:
Taxable Income =
Net Operating Income - interest - depreciation.
Tax Liability =
Taxable Income x Marginal Tax Rate.
After Tax Cash Flow =
Cash Throw Off - Tax Liability.
The After-Tax Cash Flow for the initial and successive years may be
calculated by the following HP-12C program. This program calculates the
Net Operating Income using the Potential Gross Income, operational cost
and vacancy rate. The Net Operating Income is readjusted each year from
the growth rates in Potential Gross Income and operational costs.
The user is able to change the method of finding the depreciation from
declining balance to straight line. To make the change, key in
line 32 of the program in place of
Display
240.00 Mortgage term.
0.96 Mortgage rate.
Property value.
-7,465.01 Monthly payment.
120.00 Projection period.
-530,956.57 Mortgage balance in 10 years.
Estimated resale.
56,000.00 Transaction costs.
744,000.00 Cash Proceeds of Resale.
213,043.43 Net Cash Proceeds of Resale.
9
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