Suppose That You Are Attempting to Value an Income Producing

question 28

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 7.5%. If the projected first year net operating income (NOI) for the subject property is $135,500, what is the indicated value of the subject using direct capitalization?

• A) $144,985.00
• B) $150,555.56
• C) $1,806,666.67
• D) $9,033,333.33

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Definitions:

Strategic Business Unit Level

A distinct part of a larger corporation, focused on a specific strategic objective or market sector.

Targeted Customers

A specific group of consumers identified as the primary audience for a product or service, based on shared characteristics or needs.

Overall Strategy

A comprehensive plan detailing how a business or organization will achieve its goals and objectives.

Strategic Business Unit Level

A division or unit within a larger organization that operates with its own mission, vision, and objectives, and focuses on specific market segments.