Suppose That You Are Attempting to Value an Income Producing

question 31

Multiple Choice

Suppose that you are attempting to value an income producing property using the direct capitalization approach. Using data from comparable properties, you have determined the overall capitalization rate to be 11.44%. If the projected first year net operating income (NOI) for the subject property is $44,500, what is the indicated value of the subject using direct capitalization?

• A) $49,590.80
• B) $50,225.73
• C) $388,986.00
• D) $509,080.00

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Definitions:

Personal Selling

A form of direct marketing involving face-to-face interaction between a salesperson and a potential buyer to close a sale.

Order Taking

The process of recording or receiving orders for goods or services from customers.

Order Getting

The process of securing purchase orders from customers, often involving direct personal selling and negotiation.

Inbound Telemarketing

A marketing approach where a company receives calls from interested customers or potential leads, often as a result of advertising or promotional activities.