What is your estimate of the propertys value

Assignment Help Financial Management

Reference no: EM131048144

A property produces a first-year net operating income of $24,000. Because of the long economic life of the building, the income is considered as a perpetuity that will grow by 2.5% per year. Using a discount rate of 9.5%, what is your estimate of the property's value?

Reference no: EM131048144

Questions Cloud

Probability that six fishes bite during the two hours : What is the probability that six fishes bite during the first two hours - what is the probability that he fails to catch any fishes during the first two hours?

What was the average real risk premium : You’ve observed the following returns on Doyscher Corporation’s stock over the past five years: –27.9 percent, 15.6 percent, 34.2 percent, 3.3 percent, and 22.3 percent. The average inflation rate over this period was 3.33 percent and the average T-b..

Which model do you identify with the best and why : There are several analytical models used in the project management and business communities. Which model do you identify with the best and why?

What is the optimal hedge ratio : A food processing company knows that it will buy 1 million bushels of corn in three months. The standard deviation of the change in the price per b of bushel over a 3-month period is calculaed 0.055 (5.5%). What is the optimal hedge ratio

What is your estimate of the propertys value : A property produces a first-year net operating income of $24,000. Because of the long economic life of the building, the income is considered as a perpetuity that will grow by 2.5% per year. Using a discount rate of 9.5%, what is your estimate of the..

How does your model address redesign concerns issues : What activities occur during each step/phase of your analytical process? Why did you choose to use a cyclical or linear process/model? How does your model address redesign concerns/issues?

The rate of turnover of inventory is unusually low : The rate of turnover of inventory is unusually low in comparison with previous years

Risk class for which the appropriate capitalization rate : Assume that a firm belongs in a risk class for which the appropriate capitalization rate, ρc , is 12%, and the firm has $1,000,000 worth of debt and $5,000,000 worth of stock outstanding. If the riskless interest rate is 6%, what is this firm’s cost ..

Criteria specify a debt service coverage ratio : Consider an 8.5% loan amortizing at a 25-year rate with monthly payments. What is the maximum amount that can be loaned on a property whose net operating income (NOI) is $500,000 per year, if the underwriting criteria specify a debt service coverage ..

User Account

All Pages