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kindly solve the questions using excel You are considering the purchase of an office building for $1.5 million today. Your expectations include the following: first-year
kindly solve the questions using excel
You are considering the purchase of an office building for $1.5 million today. Your expectations include the following: first-year potential gross income of $340,000; vacancy and collection losses equal to 15 percent of potential gross income; operating expenses equal to 40 percent of effective gross income and capital expenditures equal 5 percent of EGI. You expect to sell the property five years after it is purchased. You estimate that the market value of the property will increase four percent a year after it is purchased and you expect to incur selling expenses equal to 6 percent of the estimated future selling price. What is estimated net operating income (NOI) for the first year of operations? What is the estimated going-in cap rate (R.) using NOI for the first year of operationsStep by Step Solution
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