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Estimate the leasehold yield

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Question - A leasehold investment has recently been sold for $500,000. The lease has 6 years to run without rent review. The tenant pays a contractual rent of $50,000 per annum. The full market rent at present is $200,000 per annum.

a. If the sinking fund rate is 3%, estimate the leasehold yield.

b. If the investor pays tax at 36%, what is the leasehold yield?

Reference no: EM133056928

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