A commercial property has PGI of $10 million, expenses of 40% of EGI and the vacancy is underwritten at 10%. What values would the following parameters suggest for the property. Cap rate= 5%. ÉĞI Multiplier=12x and PGÍ multiplier equals 11x.

A commercial property has PGI of $10 million, expenses of 40% of EGI and the vacancy is underwritten at 10%. What values would the following parameters suggest for the property. Cap rate= 5%. ÉĞI Multiplier=12x and PGÍ multiplier equals 11x.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A commercial property has PGI of $10 million,
expenses of 40% of EGI and the vacancy is
underwritten at 10%. What values would the
following parameters suggest for the
property. Cap rate= 5%. ĒĞI Multiplier=12x
and PGÍ multiplier equals 11x.

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Step 2:Computation of value as per Cap Rate

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Step 3: Computation of value as per EGI Multipier

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Step 4: Computation of value as per PGI Multiplier

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