• Use the following property data:

Cash flow from operations:

Year 1 2 3 4 5

NOI $150,000 $150,000 $150,000 $150,000 $150,000

Debt Service $125,000 $125,000 $125,000 $125,000 $125,000

Cash Flow at sale:

Sale Price: $2,000,000

Cost of sale: $125,000

Mortgage balance: $1,500,000

• Assuming the going-in capitalization rate is 8.00 percent, compute a value for the property using direct capitalization. andAssuming the required yield/return on unlevered cash flows is 10 percent, and that the property will be held by a buyer for five years, compute the value of the property based on discounting unlevered cash flows?