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Based on the approach we learned in lecture, estimate the Market Capitalization Rate for your area. Show your work and explain your reasoning.

Based on the approach we learned in lecture, estimate the Market Capitalization Rate for your area. Show your work and explain your reasoning.

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
Problem 1PS
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The investment scorecard you've been keeping for office properties in you market has the following entries: Comparable Property A Net Operating Income: $105,000 Sale Price: $1,329,000 Comparable Property B Net Operating Income: $56,000 Sale Price: $675,000 Comparable Property C Net Operating Income: $83,000 Sale Price: $1,012,000 Based on the approach we learned in lecture, estimate the Market Capitalization Rate for your area. Show your work and explain your reasoning.
Transcribed Image Text:The investment scorecard you've been keeping for office properties in you market has the following entries: Comparable Property A Net Operating Income: $105,000 Sale Price: $1,329,000 Comparable Property B Net Operating Income: $56,000 Sale Price: $675,000 Comparable Property C Net Operating Income: $83,000 Sale Price: $1,012,000 Based on the approach we learned in lecture, estimate the Market Capitalization Rate for your area. Show your work and explain your reasoning.
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When making investments in real estate properties we look at their market capitalization rate as in important metric. This metric shows us the expected rate of return on a real estate investment property.

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