Ms Kline Estimates That a Commercial Building She Is Thinking

question 14

Multiple Choice

Ms. Kline estimates that a commercial building she is thinking of purchasing has gross potential income of $47,000 and a vacancy rate of 7%. She estimates that the operating costs are $25,000 per year and a nearby property with an NOI of $7,500 just sold for $65,000. What is the estimated value of this building?

• A)$65,000
• B)$162,153
• C)$163,932
• D)$165,393
• E)$1,639,320

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Definitions:

Queue Time

refers to the duration that items or tasks spend waiting in line to be processed, which can impact the efficiency and throughput of operations.

Non-Value-Added Time

Time spent in production that does not directly add value to the product or service, often targeted for reduction in process improvement initiatives.

Balanced Scorecard

A strategic planning and management system used to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organizational performance against strategic goals.

Return on Investment (ROI)

An evaluation metric that assesses the effectiveness or financial gain of an investment by dividing the net earnings by the initial investment cost.