A property produces a first year NOI of $100,000 which is expected to grow by 2% per year. If the property is expected to be sold in year 10, what is the expected sale price based on a terminal capitalization rate of 9.5% applied to the eleventh year NOI?

the expected sale price based on a terminal capitalization rate is $1283152

Explanation:

The NOI (net operating income) is used in the estimation of the profitability in real estate investment.

The first year NOI of a property is $100000 and it is expected to grow by 2% (0.02) per year and to be sold in next ten years (n = 10 years).

r = 100% + 2% = 102% = 1.02

After ten years, the NOI = first year NOI × = $100000 × (1.02)¹⁰ = $121899.442

The terminal capitalization rate is 9.5%. Therefore the expected sale price based on a terminal capitalization rate = $121899.442 / 9.5% = $121899.442 / 0.095 = $1283152

the expected sale price based on a terminal capitalization rate is $1283152

answer; /// (b) i believe its that is paid to state and federal taxing authorities;

start by isolating the variable on one side by adding 43w^2 to both sides.   the equation will read:

25w^2+5=0

*subtract 5 from both sides*

25w^2=-5

*divide both sides by 25*

w^2=-1/5

*take the square root of both sides*

w=√(-1/5)

the square root of -1 is i.   the square root of 5 remains √5

the answer is i/√5.

hope this