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eduard
3 years ago
5

A property is being appraised using the income capitalization approach. Annually, it has an estimated gross income of $48,000, v

acancy and credit losses of $3,600, and operating expenses of $15,000. Using a capitalization rate of 8%, what is the property’s value (rounded up to the nearest $1,000)?
Business
1 answer:
lions [1.4K]3 years ago
4 0

Answer:

$368,000

Explanation:

In order to appraise the property using the capitalization approach, we must first determine a net cash flow:

net cash flow = $48,000 - $3,600 - $15,000 = $29,400

Now we calculate the property value using the perpetuity formula:

property value = net cash flow / capitalization rate = $29,400 / 8% = $367,500 which we must round up to $368,000

A property is being appraised using the income capitalization approach. Annually, it has an estimated gross income of $48,000, vacancy and credit losses of $3,600, and operating expenses of $15,000. Using a capitalization rate of 8%, what is the property's value (rounded up to the nearest $1,000)?

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<u>Answer</u> is D. remain at $30,000.

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3 years ago
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Worth of both the property will be same.

Explanation:

Data provided in the question:

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Now,

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Cap rate is given as = [ NOI ] ÷ [ Worth of the property ]

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3 years ago
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Hope it helped...Please mark brainliest. Have a nice day!

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2 years ago
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2 years ago
Nadine is retiring today at age 66 and expects to live to age 82. She has $136,000 in her retirement savings account. She is som
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