Question $2$

Suppose an examination of a pro forma reveals that the fifth$-$year net

operating income $($ NOI $)$ for an income$-$producing property you are

analyzing is $$420,058($you can assume that this cash flow occurs at the

end of the year$).$ If you estimate the projected growth rate for the

property's NOI to be $3\%$ per year, calculate the projected sale price of the

property at the end of year five if the going$-$out capitalization rate is $8\%.$

Which of the following is closest to the projected sale price of the

property?

$$33,600$

$$9,020,563$

$$5,400,000$

$$5,250,000$