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A class C hotel in Ghosttown is for sale. Based on its average daily rates and operating and other expenses projections, it is estimated that
A class "C" hotel in Ghosttown is for sale. Based on its average daily rates and operating and other expenses projections, it is estimated that next year it will produce $113,000 in net operating income. This income is then expected to grow by 6% per year indefinitely. An out-of-town investor is considering buying the property and selling it 11 years from today. Investor's required return is 11%. Calculate the estimated resale price.
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