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:

Fixed Price

A pricing strategy where the cost of goods or services is set and does not fluctuate with changes in the market or inventory costs.

Given Date

A specific date mentioned or defined within a particular context or document.

At the Money

A term used in options trading to describe an option with a strike price that is identical or very close to the market price of the underlying security.

Employee Stock Options

The right granted to employees by a company to buy its shares at a discounted price or a specific price within a specified time period.