Question: In a property transaction, a buyer's calculated investment value is $3,500,000, while the seller's calculated investment value is $2,000,000. What is the likely selling price

In a property transaction, a buyer's calculated investment value is $3,500,000, while the seller's calculated investment value is $2,000,000. What is the likely selling price for this transaction?

A property has a McDonald's restaurant on it, which can earn $50,000 per year. In any other use (including another brand of restaurant), the most it can earn is $40,000 per year. Assuming a discount rate of 10% and constant cash flow in perpetuity, what is the "investment value" of this property to McDonald's, and what is its "market value"?

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