The value of the property using the capitalization formula

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Reference no: EM131916117

1.Investor thompson is seriously considering the acquisition of a rental property with a potential gross income of $43,200.00 per annum. The allowance for vacany and bad debts is 4.5% of potential gross income and annual operating expenses are estimated to be $19,750. The value of the building based on a capatilization rate of 12% is?

a.$195,417

b.$179,217

c.$157,500

d.$164,583

2.If the net operating income before depreciation of a building is $31,200 anually, and the overall capitalization rate for rate this type of property is 12.5%, the value of the property using the capitalization formula is?

a.$312,050

b.$265,700

c.$249,600

d.$390,000

c.The Provincial Land Transfer Tax for a commercial property sellling for $387,000 is:

a.$4,280

b.$3,595

c.$5,805

d.$4,965

Reference no: EM131916117

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