Question: You are analyzing a property in which you expect net operating income to remain constant at $25000 over the next five years. at that time,

You are analyzing a property in which you expect net operating income to remain constant at $25000 over the next five years. at that time, the property will be valued by applying a terminal capitalization rate of 9% to the projected sixth-year net income. You believe that the 6th year NOI will be 5% greater than that of the fifth year. You also believe that you will suffer 6% selling expenses when the property transacts at the end of the holding period. if 11% is the discount (yield) rate needed to attract investors, what is the current indicated value of this property?

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