Question
Ali is considering buying a commercial building in Chicago. He has learned the following facts from his real estate broker: Based on the facts below,
Ali is considering buying a commercial building in Chicago. He has learned the following facts from his real estate broker:
Based on the facts below, what is the Market Price for this building?
| Market Cap Rate | 7.00% |
| Rental Income | $2,000,000 |
| Operating Expenses | $800,000 |
| Existing Annual Mortgage Payment | $151,000 |
| Interest expense per year | $100,000 |
| A. | $14,985,714 | |
| B. | $13,557,143 | |
| C. | $17,142,857 | |
| D. | Cannot determine with the facts that are given |
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Economics And Personal Finance
Authors: Irvin Tucker, Joan Ryan
1st Edition
1133562108, 978-1133562108
