Year NOI PV Lump Sum Factor at 10% PV 1 $91,670 .9091 $83,337 2 $94,420 .8264 3

Question

Year

NOI

PV Lump Sum Factor at 10%

PV

1

$91,670

.9091

$83,337

2

$94,420

.8264

3

$

.7513

4

$

.6830

$

Total PV and Appraised Value

$

The values in Table 1 (Yellen Apartments) are partially filled in. The NOI is projected to grow at 3% per year for four years and at 2% thereafter. The going out cap rate is 12%.

The horizon value is:

a. $1,135,266

b. $1,031,750

c. $1,021,737

Year

NOI

PV Lump Sum Factor at 10%

PV

1

$91,670

.9091

$83,337

2

$94,420

.8264

3

$

.7513

4

$

.6830

$

Total PV and Appraised Value

$

Explanation / Answer

1021737 = 102174*(0.12-0.02)

Horizon value = 1021737

Option C

Year (n) NOI PV lumpsum factor = 1/(1+0.1)^n PV = NOI * PV lumpsum factor 1 91670 0.909090909 83336.36364 2 94420.1 0.826446281 78033.1405 3 97252.7 0.751314801 73067.39519 4 100170.3 0.683013455 68417.65186 4 1021737 0.683013455 697860.049 PV - Appraisal 1000714.6

Related Questions

Navigate

• Browse (All)
• Browse Y
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.