OI for a property in the coming year is $578,000. The forward cap rate is at a 3% premium to the risk-free rate, and capital appreciation is 5.5% p.a. What is the current value of the property using direct capitalization? Government bonds are yielding 2.47%. a. $9,347,457 b. $8,791,749 c. $12,344,579 d. $11,147,898 e. $10,566,728

A property with a trailing cap rate of 5.7% was purchased for $28,480,000. The purchase was financed using an interest-only debt of 70% at an interest rate of 5.85% per annum. Capital improvements are $238,000 and structural reserves are $115,000 in Year 1. The income return on equity (ROE) for this property at the end of Year 1 is:

A property was purchased 5 years ago for S1 million and generated NOl of $70,000 in Year 1.The NOl will increase at 5% per annum. If the forward cap rate of the property has risen by 1% from7% to 8%, today compared to 5 years ago, what price would a potential buyer have to pay for theproperty now, if they used forward cap rates exclusively?

The projected NOI for a property purchased at S1.2 million is S100,000 in Year 1. The NOl isexpected to increase at a rate of 5% per annum, The property is sold at the end of Year 2 for$1.5 million. Given a safe reinvestment rate of 5%, what is the modified internal rate of return(MIRR) of this project?

A Real Estate investment Company (REIC) has a weighted average cost of capital at 10% and$2 million of total capital to invest. The REIC aims to earn rental income from the investmentand do not intend to sell the property in the short term. Which of the following property is themost appropriate one to invest? Property A: 10% Cap Rate, NOI S100.000a Property A: 11% Cap Rate NOI S180.000o b OaNone of the above Property A: 12% Cap Rate, NOI $300.000Od e. Property A:8% Cap Rate, NOI S400.000

An investment property is purchased for $18,540,000 with 50% equity and an interest-onlyloan to finance the balance. The average appreciation rate of the property is 5% per annumAll operating costs, including finance costs, are exactly equal to rent income. If the property issold after 10 years and selling costs are 3% of the sale price (based on market valuation ofdetermined from the annual rate of appreciation), the ROE (return on equity) is.