A Property Produces a First Year NOI of $100,000 Which

question 15

Multiple Choice

A property produces a first year NOI of $100,000 which is expected to grow by 2% per year.If the property is expected to be sold in year 10,what is the expected sale price based on a terminal capitalization rate of 9.5% applied to the eleventh year NOI?

• A)$1,308,815
• B)$1,283,152
• C)$1,263,158
• D)$1,257,992

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Definitions:

Post-Closing Trial Balance

A list of all accounts remaining after closing entries have been made, showing the balances ready for the next accounting period.

Closing Entries

Journal entries made at the end of an accounting period to transfer temporary account balances to permanent accounts, thus preparing the books for the next period.

Unadjusted Trial Balance

A preliminary list of all accounts and their balances before any adjusting entries are made, used to verify the equality of debits and credits.

Closing Entry

A closing entry is an accounting action that transfers the balances of temporary accounts to permanent accounts, thereby resetting the temporary accounts to zero for the start of the next accounting period.