For the Following Two Questions: Suppose an Office Building Has

question 6

Multiple Choice

For the following two questions: Suppose an office building has a single tenant who pays $50,000 per year at the end of each year in a 5-year triple-net lease annual payments) . At the end of the sixth year you expect the rent to rise to $70,000 per year. At the end of 10 years, just after collecting the rent for that year, you expect to sell the building for 10 times the rent that year.
-What is the value of the property if the required initial return is 12 percent per year?

• A) $44,643
• B) $416,667
• C) $548,801
• D) $583,333
• E) $770,000

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Definitions:

Communism

A socio-political and economic ideology aiming for a classless society in which the means of production are owned communally, and private property is nonexistent or severely curtailed.

Manufacturing Economy

A system where a country's economy is heavily reliant on the production and export of manufactured goods.

Crop Rotation

A method in agriculture where different types of crops are grown in the same area in sequenced seasons to improve soil health and reduce pests.

Rural Areas

Regions characterized by low population density and vast open spaces, typically dominated by agriculture and natural landscapes.