Question
Consider a building with a very long economic life. Assume at the end of year 5, NOI will be $80,000 as is expected to grow
Consider a building with a very long economic life. Assume at the end of year 5, NOI will be $80,000 as is expected to grow at a rate of 2 percent per year. You companys required rate of return is 12 percent. As part of your analysis, you must calculate the reversion value (REV) at the end of year 5, which would be:
| a. | $800,000 | |
| b. | $4,000,000 | |
| c. | $571,429 | |
| d. | $816,000 |
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International Financial Reporting And Analysis
Authors: David Alexander, Ann Jorissen, Martin Hoogendoorn
8th Edition
978-1473766853, 1473766850
