You are considering purchasing a rental property for $500,000. You expect the property to generate a net operating income of $46,000 per year adjusted each year by 3.5% increases. You expect to sell the property in 4 years with the going-out cap rate to be 8.5%. Your required return for this investment is 10%. What is the present value or investment value of this property based on cash flow? Answers: $550.589 $625.458 $577,182 $605.426
You are considering purchasing a rental property for $500,000. You expect the property to generate a net operating income of $46,000 per year adjusted each year by 3.5% increases. You expect to sell the property in 4 years with the going-out cap rate to be 8.5%. Your required return for this investment is 10%. What is the present value or investment value of this property based on cash flow? Answers: $550.589 $625.458 $577,182 $605.426
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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Transcribed Image Text:You are considering purchasing a rental property for $500,000. You expect the property to generate a net operating income of $46,000 per year
adjusted each year by 3.5% increases. You expect to sell the property in 4 years with the going-out cap rate to be 8.5%. Your required return
for this investment is 10%. What is the present value or investment value of this property based on cash flow?
Answers:
$550.589
$625.458
$577,182
$605.426
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