A Property Produces a First-Year Net Operating Income of $24,000

question 13

Multiple Choice

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%,the property value is estimated at:

• A)$276,968
• B)$252,632
• C)$200,000
• D)$342,857

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Definitions:

Monroe Doctrine

A principle of US foreign policy, declared in 1823, which opposed European colonialism in the Americas and stated that any intervention by external powers would be seen as a threat to the US.

European Powers

Refers to the nations of Europe with significant political, military, and economic influence, especially noted during the colonial and imperial periods.

New Colonies

Territories that have been recently established or acquired by a country, typically overseas, for the purpose of expansion, settlement, and exploitation.

Missouri Compromise

A significant legislative agreement passed in 1820 in the United States, admitting Missouri as a slave state and Maine as a free state, maintaining a balance between slave and free states.