Suppose that a site can be developed a rental property at a cost of $500,000 with a annual NOI of $65,000. Assuming the cap rates for the building and for the land are 10% and 8% respectively. Calculate the value of the land? O $187,500 O $155,622 O $123,159 O None of the given answers O $118,687
Suppose that a site can be developed a rental property at a cost of $500,000 with a annual NOI of $65,000. Assuming the cap rates for the building and for the land are 10% and 8% respectively. Calculate the value of the land? O $187,500 O $155,622 O $123,159 O None of the given answers O $118,687
Chapter10: The Basics Of Capital Budgeting: Evaluating Cash Flows
Section: Chapter Questions
Problem 19P
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![Suppose that a site can be developed a rental property at a cost of $500,000 with a annual NOI of
$65,000. Assuming the cap rates for the building and for the land are 10% and 8% respectively.
Calculate the value of the land?
O $187,500
O $155,622
O $123,159
O None of the given answers
O $118,687](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe901eb44-7e25-4e1b-9f69-2f8821df0eab%2F41d6db6d-b7b2-4365-941a-1abbaa76625d%2Fekncvg_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Suppose that a site can be developed a rental property at a cost of $500,000 with a annual NOI of
$65,000. Assuming the cap rates for the building and for the land are 10% and 8% respectively.
Calculate the value of the land?
O $187,500
O $155,622
O $123,159
O None of the given answers
O $118,687
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