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Business, 30.11.2019 01:31 gymnastlyfe123

Use the following information to answer questionsyou are considering purchasing a small office building for $1,855,000your expectations include: – first-year gross potential income of $350,000; – vacancy & collection losses equal to 8% of pgi; – operating expenses = 35% of egi; – capital expenditures = 4% of egi– $1,390,200 mortgage @ 6%– mortgage will be amortized over 30 years– total up-front financing costs = 3% of the loan amountcalculate going-in cap rate (ro): question 16 options: 8.54%9.34%7.50%10.59%

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