A Property Is Leased for $24,000 Per Year Although Market

question 41

Multiple Choice

A property is leased for $24,000 per year although market rents are currently $27,500 per year and are expected to increase by 2% per year.The property is expected to be sold at the end of year 10 based on a 10% terminal cap rate applied to the eleventh year NOI.The current lease on the property will expire at the end of year 10 so the property can be leased in the eleventh year at market rates.What is the value of the leased fee estate based on an 11.5% discount rate?

• A)$362,489
• B)$298,325
• C)$251,298
• D)$271,486

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Definitions:

Sharps Disposal

The practice of safely disposing of needles, blades, and other medical instruments that can puncture or cut skin, to prevent injury and disease transmission.

Methicillin-Resistant Staphylococcus Aureus

A type of bacteria that is resistant to several antibiotics, including methicillin, making infections difficult to treat.

Contact Precautions

Infection control measures used in healthcare settings to prevent the spread of diseases through direct or indirect contact.

Airborne Precautions

Infection control measures taken to prevent the spread of diseases transmitted by airborne particles, requiring specialized equipment like N95 respirators.