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C-] 7 011 J04by3ub3- hUJMLLIb Nlkat 1.3 $400 per month for each detorted level of additional services. Fach '$5,000 in incremental increase in a Scnior consumers annual income: will support approximately 5300 to $400 in increased monthly service fees, lculat on of Minimupil` u Hing Card F.v income for arkate ottthly kteutal Rates Exhibit 1-3 presents the minimum qualifying cash flaw income requircrnents for the proposed assisted living community. These requirements are based on the recommended monthly service fees. The recommended monthly fees for carII of the unit types have been annualized and then the earlier stated expenditure factor of 75% for assisted living (arid 85% for Alzheimer's care) was applied to the annualized monthly fees - resulting in the total annual cash flow reyuircrnents After taxes. Art average tax rate of 15% of Senior householders' incomes was then factored in - resulting in the required annual cash flow be[M taxes. Based on this analysis, it is the opinion of MDS that the minlrnutn qualifying rash flow income criteria for the subject assisted living units, as currently concei Td, will lie $40,000 to $45,000 • in 1999 dollars. Sources of lncotng - Typical sources of cast, flow income for Seniors include Social Security, ' savings and pensions. Other sources of income include Investments to stocks, bonds, commodities r. and real estate - and possibly other types of investments. 'rhe income (Tont these investments are b pan of the reported income that MDS uses in establishing ilia age- vcrsus-inconiescreening criterion. There are two additional categories of income sources which MDS does fLo.S inc1ucle to our analysis as we do not feel they are valid qualifiers. 1-hcsc include actual spend down of p6iwtpal assets of the Senior and the possible financial sup;poil by family meruben. While both of these "sources of cash'" certainly exist • it is our opinion that they are not an appropriate cum ideratrort in ratablrt'hinr3 market feasibility. MDS' analpxts assumes that the pvmertttal anti ate p4v ttroogvcts have 1 t.l: