Question

Render an opinion/analysis of the assessment and taxes on a property which your employer is about to acquire. Provide a detailed, illustrated analysis of the assessment and taxes and render an opinion of whether they are appropriate. Whatever you conclude explain the economics and your conclusion. The facts are as follows: the equalization rate is 18.988%; the capitalization rate is 9%; the NOI is $628,992; and the tax rate is $1,288.98912 per $1000 of assessed value and the assessment is $2,888,219. (HINT NOT ALL NUMBERS HAVE TO BE USED)

Answer 1

Information given in question

Capitalisation rate 9% which is equal to 0.09

NOI = $628,992

CAPITALIZATION RATE =

= $628,992 / 0.09

= $6,988,800

Equalization rate is 18.988% which is equal to 0.18988

Equalization rate =

Assessed Value =

= 0.18988 * $6,988,800

= $1,327,033

Assessed Value is $1,327,033

Tax rate $1,288.98912 per $1000 is 1.288989

Property Tax =

= 1.288989 * 1327033

= $1,710,531

According to the data given in the question the amount of property tax is $1,710,531