This provides information regarding a building that is being appraised. The holding period for the building is 3 years.
 

Item Required return for the subject building Potential gross income next year Increase in potential growth income each year Miscellaneous income from parking, vending, etc. for each year Capital expenditures next year Increase in capital expenditures each year Vacancy & collection losses for each year Operating expenses next year Increase in operating expenses each year Going-in cap rate Terminal cap rate minus going-in cap rate Selling expenses as a share of terminal vale (selling price) Note 10.00% $2,000,000 $100,000 $300,000 $100,000 $100,000 20% of potential gross income $300,000 $80,000 10.20% 1.30% 25.00% a. What is expected NOI for the building in years 1, 2, 3, & 4? Round your answers to the nearest dollar and write them in the box. Year 1 Year 2 Year 3 Year 4 b. What is the net selling price of the building at the end of the holding period? Round your answer to the nearest dollar and write it in the box. c. What is the estimated value of the building based on DCF? Round your answer to the nearest dollar and write it in the box. d. What is the estimated value of the building based on the direct capitalization method and its cap rate? Round your answer to the nearest dollar and write it in the box.