Capitalization rate = net operating income / market value
Market value = Selling price
Property 1= 82000/1250600= 0.066
Property 2= 75000/1146300= 0.066
Property 3= 94000/ 1433600= 0.066
QUESTION 35 What is the capitalization rate? / / Property 1 Property 2 Property 3 Subject...
QUESTION 29 What is the gross income multiplier? Property 1 Property 2 Property 3 Subject NOI 82,000 75,000 94,000 60,000 EGI 122,000 111,500 140,000 108,000 Selling Price 1,250,600 1,146,300 1,433,600 6.54 10.25 8.70 15.15
#1 MULTIPLE CHOICE (no need to show work but please get right) 1. A property has a net operating income of $25,000 and the capitalization rate used in the market is 10%. What is the indicated value? a) $250,000 b) $300,000 c) $325,000 d) $2,500,000 2. A property sold for $555,000. The buyer anticipated that the potential gross income (PGI) would be $93,000, the vacancy would be 5%, and expenses would be 35% of the effective gross income (EGI) in...
Property Assumptions: Purchase Price: $4,000000 Year 1 PGI: $540,000 PGI Growth Rate (Annual): 3% Annual Vacancy and Collection Loss (VCL): 10% Year 1 Operating Expenses (OER): 35% OPEX growth rate after first year 2% Sales Price: -Capitalize HP+1 NOI at 9% $3,895,042 Anticipated Holding Period: 3 Years Maximum LTV: 70% Interest Rate: 5% Amortization Rate: 30 Years Payments Per Year: 12 Investor Hurdle Rate (Unleveraged): ...
James Scheidt is looking at a free-standing retail center that is subject to a triple net lease to DrugSmart. The property’s lease payment for the first three years is $250,000 per year. In lieu of percentage rent, the rent contractually increase 2% per year starting in year-four. James investment period is five years and he intends to sell the property at market rate pricing at the end of year-five. The market requires a real rate of return of 7% on...
Question 1: (35 marks) (a) From an advertisement of property development company, Mary learns that the following payment plans are available for a property with market price of $6,000,000: Plan (A) (i) Down payment of $2,000,000 upon signing of provisional sales and purchase agreement; (ii) $2,000,000 will be paid after one year; (iii) A final payment of $2,000,000 when the property is ready for occupancy as at the end of the second year. Plan (B) Purchaser will enjoy a price...
2. Consider the information in Tables 1 and 2 Table 1 Market Capitalization Rate Stock iStock Price Dividend (Div) Return onPayout RatioGrowth Rate (PR) Equity (ROE) 12 14 16 10% 20% 30% 20% 10% 100% 50% 100% 0% 3 175 0% Table 2 Bond i Par Value Coupon Frequend Yearl earl Bond Maturity Yield to Maturit 6.5% 7.5% Coupon Rate 1,000 1,000 10% 5% 4 Years 3 Years (a) Consider Table 1. Complete the blanks in Table 1 (b) Consider...
1) What is the incremental annual after-tax Cash Flow
earned from owning leasing ?
2) Assuming at the end of year 10 the buyer of the building
determinate they could landlord, attract a new tenant, lease the
building and obtain the following NOI:
Rent
250,000
Operating Expenses
75,000
Real Estate taxes
40,000
NOI 135,000
What is the implied cap rate if the building is sold for
$2,250,000?
to decide if the new office leasing are estimated in the s will...
Use the table below to answer this question 1 MACRS 5-year property Year Rate 20.00% 2 32.00% 2 19.20 4 11.52% 5 11.52% 6 5.76% Ronnie's Custom Cars purchased some fixed assets two years ago for $65,000. The assets are classified as 5-year property for MACRS. Ronnie is considering selling these assets now so he can buy some newer fixed assets which utilize the latest in technology. Ronnie has been offered 544 500 for his old assets. What is the...
a.
What is the profitability index of the project?
1.30
b.
What is the IRR of the project?
28.31%
c.
What is the NPV of the project?
$ 18,096,790.85
d.
How sensitive is the NPV to changes in the price of the new
PDA?
e.
How sensitive is the NPV to changes in the quantity sold?
I want to make sure a b and c are correct and need d and e
$ Equipment Pretax salvage value $ R&D 32,500,000...