Your client, Jorge, is a novice investor. He wants you to help him analyze and re-...

 

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Your client, Jorge, is a novice investor. He wants you to help him analyze and re- construct the income statement of a retail plaza that interests him. The plaza has 15 units, all which are rented out. The actual annual income is $140,000, but the annual potential rental income is $480,000. The list price is $5,900,000 and the operating expenses are $181,000 per year. What should you tell Jorge regarding calculating the essential value of the plaza using the income approach? Your client, Jorge, is a novice investor. He wants you to help him analyze and re- construct the income statement of a retail plaza that interests him. The plaza has 15 units, all which are rented out. The actual annual income is $140,000, but the annual potential rental income is $480,000. The list price is $5,900,000 and the operating expenses are $181,000 per year. What should you tell Jorge regarding calculating the essential value of the plaza using the income approach?

Answer rating: 100% (QA)

To help Jorge analyze and reconstruct the income statement of the retail plaza we can use the income approach to determine its essential value The inc... View the full answer