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A property that produces a first year NOI of $18,000 is purchased for $135,000. The NOI is expected to increase by 7% in the fourth year when some of the leases turnover. The resale price in year 8 is expected to be $149,000. What is the
Answer: NPV = $17,829
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- A property produces a first year NOI of $80000 which is expected to grow by 2.0 percent per year. If the property is expected to be sold in Year 10, what is the expected sale price based on a terminal capitalization rate of 5.5 percent applied to the 11 year NOI? O $2,216,353 $2,039,045 O$1,773,083 O $1,329,812 O $1,861,737A property produces a first year NOI of $300,000 which is expected to grow by 3% annually. If the hold period is 3 years, what is the expected sales price based on a terminal capitalization rate of 9% applied to the 4th year NOI? a)3000000 b)3500000 c)3536333 d)3642423Assume that property investor expects NOI to be $55 000, $64 000 and $67 000 for next 4 years with capitalisation rate of 11%, holding period expected to be 32 years with annual appreciation of 3% and sale commission of 6%. Would you buy the property if owners would like to sell it for $520 000?
- Let us assume that an investor can obtain an 80% LTV loan for a property valued at 500,000 at a 10% interest rate to be amortized over 25 years with monthly payments. If the property generates $70,000 net operating income per year, answer the following. What would be the Before-Tax Cash Flow from the Property Sale (BTCFs) if the property were sold in Year 5 for $440,000? $63,344.93 $816,655.07 $396,382.36 $440,000.00A property is expected to have net operating income during the first year of $50,000, which is projected to increase at a rate of 4% p.a. over a five-year holding period. The property value is also projected to increase at a rate of 4% p.a. The valuer believes that a 14% discount rate is appropriate. What is the estimated value of the property? Assume rent is paid annually in arrears. $500,000. b. $184,054. a. C. $357,143. d. $292,150.A manufacturer can lease a machine for 7 years at $3,000 per quarter, payable at the beginning of each quarter. Alternatively, they can purchase the machine for $78,000 and sell it for $8,700 in 7 years. The cost of capital is 6.2% compounded annually. a. What is the present value of the cost: (enter a positive value accurate to the nearest dollar) i) of the lease option? $ ii) of the purchase option? $ b. Should the manufacturer purchase or lease? O Purchase since Purchase PV is higher than Lease PV O Lease since Lease PV is higher than Purchase PV O Lease since Purchase PV is lower than Lease PV O Purchase since Lease PV is lower than Purchase PV Lease since Lease PV is lower than Purchase PV Purchase since Lease PV is higher than Purchase PV Submit Question
- Assuming the leasehold yield is 2% above the freehold yield, calculate the Years Purchase (YP) dual rate for 10 years if the accumulative rate is 3% and that a comparable freehold property let at full market rent of $40,000 has just been sold for $500,000. Hint: Analyse the market yield from the comparable first and then use it to calculate the required YP. 4.3872 7.3625 6.1250 5.3410An investment property is purchased for $18,540,000 with 50% equity and an interest-only loan to finance the balance. The average appreciation rate of the property is 5% per annum. All operating costs, including finance costs, are exactly equal to rent income. If the property is sold after 10 years and selling costs are 3% of the sale price (based on market valuation of determined from the annual rate of appreciation), the ROE (return on equity) is: Select one: a. 7.59% b. 8.01% c. 9.34% d. 10.03% 11.38% e.An asset with a purchase price of $486,966 falls in the 5-year MACRS asset class. The asset will be sold at the end of a three year project for $153,883. What is the book value of the asset at the end of the project? Round your answer to the nearest dollar. Year Depreciable Allowance 1 20% 32 19 12 11 6. 6. 4-
- You want to build a property at a cost of $650,000 on a vacant lot. The property will have annual NOI of $80,000. The recapture rate over 50 years of the building to be two percent per year. The cap rates for the land is 6%. Assuming the mortgage rate is 5.5%, what is the value of the vacant lot? O $520,833 O $555,622 O $518,687 O None of the given answers O $523,159Consider an income property that is under evaluation for purchase with a $489,398 loan, 3.3% interest rate, compounded annually, amortized over 29 years. The NOI at the end of year 1 is $48,148, year 2 is $54,192, and year 3 is 55,470. At the end of year 3, the property is estimated to sell for $525,700. Discount the equity cash flows over the 3-year holding period at 6.0 percent. Using the principles of mortgage equity capitalization, what is the estimated total property value with a holding period of 3 years? Please post step by step solve.Estimate the value of the property using the income approach based on the following facts: Net operating income annually for next 3 years is $400000 At end of three years, property is sold with an existing cap rate of 10% and a commission of 4% on sale The discount cap rate is the same as the existing cap rate and the operating income is assumed to be received at year end