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Determine the price the investor would be willing to pay

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Reference no: EM133121118

Question - A property is expected to generate a stabilized NOI of $140,000 per year for the foreseeable future. An investor intends on owning the property for 4 years. Similar properties have sold at 10% cap rates and cap rates are expected to remain constant.

Determine the price the investor would be willing to pay for the property using the discounted cash flow approach. Assume a 6% discount rate on all cash flows including the terminal value.

Reference no: EM133121118

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