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Accounting

Problem:

A property produces a first-year net operating income of $24,000. Because of the long economic life of the building, the income is considered as a perpetuity that will grow by 2.5% per year.

Required:

Question: Using a discount rate of 9.5%, estimate that property value.

A. $276,968

B. $252,632

C. $200,000

D. $342,857

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91167236

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