Question
Consider commercial properties A and B for which the land value relative to the overall value of the property is 70% and 20%, respectively. Each
Consider commercial properties A and B for which the land value relative to the overall value of the property is 70% and 20%, respectively. Each property is currently valued at $10M.
a. If during a particular 5-year period structure prices are expected to increase by 2% annually and land prices are expected to increase by 4% annually, what is the expected value of property A and of property B at the end of this 5-year period?
b. If during a particular 5-year period structure prices are expected to increase by 2% annually and land prices are expected to decrease by 4% annually, what is the expected value of property A and of property B at the end of this 5-year period?
Provide an Excel formula
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Management and Cost Accounting
Authors: Colin Drury
8th edition
978-1408041802, 1408041804, 978-1408048566, 1408048566, 978-1408093887
