Section 1. Mortgage-Equity Approach, Present Value (PV) Approach and Direct- Capitalization Method for calculating the appraised value or Price of a property that generates income. Information: GPI = $1,000,000 with a growth rate per year of 1.05% V&C = 3% of GPI and Operating Expenses = 16% of GPI Loan terms are: 3.3%, 30 years (monthly compounding), LTV=85% Appreciation Rate = 1.05% per year and the holding-period is 2 years IRR to the developer is 22% A. Present Value Approach: (1) Calculate the WACC: (2) Calculate the Present Value of NOI: N=2 (3) Calculate the Present Value of the Reversion n=2 (4) Appraised Value