Question
You are estimating the value of a small office building. Suppose the estimated NOI for the first year of operations is $100,000. If you expect
- You are estimating the value of a small office building. Suppose the estimated NOI for the first year of operations is $100,000.
If you expect that NOI will remain constant at $100,000 over the next 50 years and that the office building will have no value at the end of 50 years, what is the present value of the building assuming a 12.2% discount rate? If you pay this amount, what is the indicated initial cap rate?
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
10th Canadian edition
1259261018, 1259261015, 978-1259024979
