A condominium unit in Toronto has a net lease of $1,100 payable at the beginning of each month for the first 10 years, and $1,400 per month payable in advance for the next 5 years, which is the balance of the term. The property will have an anticipated value of $550,000 upon expiration of the lease. A survey shows that, the current average rent for comparables is $1,200 per month for the first 10 years and $1,300 for the next 5 years. 15. Calculate the present value of the lease based on an expected rate of return of j,, - 5%. Round your answer to the nearest $100. (1) $432,100 (2) $477,400 (3) $409,600 (4) $412,300 16. Calculate the value of the tenant's interest based upon a return of j,, - 8%. Round your answer to the nearest $100. (1) $6,100

A condominium unit in Toronto has a net lease of $1,100 payable at the beginning of each month for the first 10 years, and $1,400 per month payable in advance for the next 5 years, which is the balance of the term. The property will have an anticipated value of $550,000 upon expiration of the lease. A survey shows that, the current average rent for comparables is $1,200 per month for the first 10 years and $1,300 for the next 5 years. 15. Calculate the present value of the lease based on an expected rate of return of j,, - 5%. Round your answer to the nearest $100. (1) $432,100 (2) $477,400 (3) $409,600 (4) $412,300 16. Calculate the value of the tenant's interest based upon a return of j,, - 8%. Round your answer to the nearest $100. (1) $6,100

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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