ounted the next 12 years of net operating income of property X that is for sale and is currently being leased by Burger King .The lease term is 12 years. I used the cap rate of the property 5.5% as the discount rate. I ignored any rent increases. I assumed the property could be sold for 30% more than I paid. I have decided that I will buy the property if the NPV is over the asking price of $250,000. My analysis is correct. I can certainly confirm that the property is undervalued.. timenet operat
I discounted the next 12 years of net operating income of property X that is for sale and is currently being leased by Burger King .The lease term is 12 years. I used the cap rate of the property 5.5% as the discount rate. I ignored any rent increases. I assumed the property could be sold for 30% more than I paid. I have decided that I will buy the property if the NPV is over the asking price of $250,000. My analysis is correct. I can certainly confirm that the property is undervalued..
timenet operating incomediscount rate0-1,953,3095.50%1$107,432 2$107,432 3$107,432 4$107,432 5$107,432 6$107,432 7$107,432 8$107,432 9$107,432 10$107,432 11$107,432 12$2,646,734
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