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A property produces a first year NOI of $25,012 per year. The NOI of $25,012 per year is expected to increase by 2 percent per year. The property is expected to be sold at the end of Year 11 based on a 10.4 percent terminal cap rate applied to the last year's NOI. What is the expected sale price at the end of the holding period?

A property produces a first year NOI of $25,012 per year. The NOI of $25,012 per year is expected to increase by 2 percent per year. The property is expected to be sold at the end of Year 11 based on a 10.4 percent terminal cap rate applied to the last year's NOI. What is the expected sale price at the end of the holding period?

Essentials Of Investments
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
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A property produces a first year NOI of $25,012 per year. The NOI of $25,012 per year is expected to increase by 2 percent per year. The property is expected to be sold at the end of Year 11 based on a 10.4 percent terminal cap rate applied to the last year's NOI. What is the expected sale price at the end of the holding period?
Transcribed Image Text:A property produces a first year NOI of $25,012 per year. The NOI of $25,012 per year is expected to increase by 2 percent per year. The property is expected to be sold at the end of Year 11 based on a 10.4 percent terminal cap rate applied to the last year's NOI. What is the expected sale price at the end of the holding period?
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