Ask Question
29 December, 07:05

Suppose that you are attempting to value an income-producing property using the direct capitalization approach. Using data from comparable properties, you have determined the overall capitalization rate to be 11.44%. If the projected first-year net operating income (NOI) for the subject property is $44,500, what is the indicated value of the subject using direct capitalization?

+5
Answers (1)
  1. 29 December, 07:29
    0
    Based on the calculation made, the indicated value is $3,889.86014

    Explanation:

    Using direct capitalization method, indicated value can be calculated using the formula below:

    Value = Annual net operating income NOI/Capitalization rate

    = $44500/11.44%

    Value = $3,889.86014

    Based on the calculation made above, the indicated value is $3,889.86014.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Suppose that you are attempting to value an income-producing property using the direct capitalization approach. Using data from comparable ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers