Given the Following Information, Calculate the Appropriate Going-In Cap Rate

question 17

Multiple Choice

Given the following information, calculate the appropriate going-in cap rate using general constant-growth formula. Overall market discount rate = 12%, Constant growth rate projection: 3% per year, Sale price: $1,950,000, Net operating income: $390,000, Potential gross income: $520,000.

• A) 8%
• B) 9%
• C) 10%
• D) 11.5%

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Definitions:

Multiple Alleles

Three or more alleles of a single locus (in a population), such as the alleles governing the ABO series of blood types.

Norm Of Reaction

The range of phenotypes expressed by a single genotype under different environmental conditions.

Phenotypic Possibilities

The range of possible physical and physiological traits that an organism can develop, as determined by its genetic makeup and environmental influences.

Environmental Conditions

The various physical, chemical, and biological factors that surround and affect the life and development of an organism or community.