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:

Stabilizing Natural Selection

A type of natural selection that favors the average individuals in a population, thereby maintaining genetic diversity.

Wing Lengths

The measurement of the distance from the tip of one wing to the tip of the other wing in flying organisms, often used in studies of evolution, migration, and species identification.

Bat Population

Refers to the number of individual bats within a specific area or globally, often used to study conservation status and ecological impact.

Earth's Distance

Refers to the distance from the Earth to another object in space, commonly measured in units like light-years, astronomical units, or miles/kilometers.