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What are the net sales proceeds at the end of year four

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Question - Your client is opening a new building this year. According to budget projections, annual NOI forecasts are as follows:

Year 1: $35,000

Year 2: $55,000

Year 3: $55,000

Year 4: $68,000

Year 5: $107,000

The required rate of return on investments of this type is 11%. The capitalization rate for similar 4-year-old buildings is 10%. The cost of sale is$53,500.

Required - What are the net sales proceeds at the end of year four?

a. $626,600

b. $680,000

c. $1,016,500

d. $1,070,000

Reference no: EM133077273

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