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An investor plans to purchase a building and rent it out as a storage facility. The investor estimates the facility will generate net operating income
An investor plans to purchase a building and rent it out as a storage facility. The investor estimates the facility will generate net operating income equal to $50,000 next year. Moreover, based on market analysis research, the investor expects cash flows from the facility to grow by a long-run average of 3% per year. If the investor requires an IRR on the investment of 11% to consider it worthwhile, then the reversion value is?
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