Q7. If the cap rate is 9.5%, what is the estimated value of the property?

(Must show accounting framework or keystroke sequence of HP12C to earn any credit.)

Your Answer: Q3. Suppose the investor in the previous problem (T19) is concerned that the subject property may be more expensive to operate than the comparable properties. Analysis of the operating expenses for each of the properties reveals the following net income estimates: Subject Property $52,400 Comparable 1 $65,600 (sold recently for $450,000) Comparable 2 $47,000 (sold recently for $322,500) Compute the capitalization rate implied by these transactions to estimate the value of the subject property by the net income capitalization technique. (5 points for each question) (Must show accounting framework or keystroke sequence of HP12C to earn any credit.) Your Answer: Case: Use the following information for the next four questions: (5 points for each question) Number of Units: 150 Per Unit Annual Rent: $4,000 Bad Debt Allowance: 2% Vacancy Rate: 5% Financing Costs: $85,000 Annual Depreciation: $15,000 Operating Expenses: $98,000 Your Answer: Q3. Suppose the investor in the previous problem (T19) is concerned that the subject property may be more expensive to operate than the comparable properties. Analysis of the operating expenses for each of the properties reveals the following net income estimates: Subject Property $52,400 Comparable 1 $65,600 (sold recently for $450,000) Comparable 2 $47,000 (sold recently for $322,500) Compute the capitalization rate implied by these transactions to estimate the value of the subject property by the net income capitalization technique. (5 points for each question) (Must show accounting framework or keystroke sequence of HP12C to earn any credit.) Your Answer: Case: Use the following information for the next four questions: (5 points for each question) Number of Units: 150 Per Unit Annual Rent: $4,000 Bad Debt Allowance: 2% Vacancy Rate: 5% Financing Costs: $85,000 Annual Depreciation: $15,000 Operating Expenses: $98,000