Ch 8 example #20406

Which of the following expenses is not an operating expense?

An overall capitalization rate (Ro) is divided into which type of income or cash flow to obtain an indicated market value?

Which of the following types of properties probably would not be appropriate for income capitalization?

Estimated capital expenditures

An appraiser estimates that a property will produce NOI of $25,000 in perpetuity, yo is 11 percent, and the constant annual growth rate in NOI is 2.0 percent. What is the estimated property value?

If a comparable property sells for $1,200,000 and the effective gross income of the property is $12,000 per month, the effective gross income multiplier (EGIM) is

Which of the following statements regarding capitalization rates on commercial real estate investments is the most correct?

The methodology of appraisal differs from that of investment analysis primarily regarding

Use the following information to answer questions 9-10. You have just completed the appraisal of an office building and have concluded that the market value of the property is $2,500,000. You expect Potential Gross Income (PGI) in the first year of operations to be $450,000; vacancy and collection losses to be 9 percent of PGI; operating expenses to be 38 percent of Effective Gross Income (EGI), and capital expenditures to be 4 percent of EGI. What is the implied going-in capitalization rate?

Use the following information to answer questions 9-10. You have just completed the appraisal of an office building and have concluded that the market value of the property is $2,500,000. You expect Potential Gross Income (PGI) in the first year of operations to be $450,000; vacancy and collection losses to be 9 percent of PGI; operating expenses to be 38 percent of Effective Gross Income (EGI), and capital expenditures to be 4 percent of EGI. What is the effective gross income multiplier (EGIM)?