In real estate net operating income (NOI) from a property is often divided by the cap...
In real estate net operating income (NOI) from a property is often divided by the cap rate to determine value. If we have a cash inflow (NOI) of $350,000 in year 1 and a cap rate of 6%, what is this stream of cash flows worth? Assume the cash flow continues each year to infinity.
$1,800,342
$3,107,864
$5,833,333
$6,994,826
$8,478,243
Please help urgently.
Homework Answers
cash flows worth
= NOI/cap rate
= 350000/0.06
= 5,833,333
hence the answer is 5,833,333
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