What is the market value for an investment that has a PGI of $45,000, a vacancy and
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Question:
What is the market value for an investment that has a PGI of $45,000, a vacancy and collection loss of 5%, fixed expenses of 24% of the EGI, and variable expenses of 13% of the EGI? The reserves for capital replacements are annualized at a $5,000 per year, level. The PGI is projected to increase at a rate of 2% per year, which means the expenses will increase by a similar amount. The overall discount rate is 9.5%. The holding period is five years, and the reversion is calculated at a 12% terminal capitalization rate with 5% sales expenses for the reversion.
Round you answer to the nearest $10,000.
Related Book For
Corporate Finance A Focused Approach
ISBN: 978-1439078082
4th Edition
Authors: Michael C. Ehrhardt , Eugene F. Brigham
Posted Date: