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What is value of the land using a residual value approach

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Question - You are appraising a newly constructed retail property that produces NOI of $235,000, which is expected to grow 2% per year indefinitely. Investors demand an internal rate of return (IRR) of 10% for this type of investment and you estimate the building's construction cost to be $2,467,500. Assuming you capitalize the NOI as a growing perpetuity, what is the value of the land using a residual value approach?

Reference no: EM133182447

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What is value of the land using a residual value approach : Question - You are appraising a newly constructed retail property that produces NOI of $235,000, What is value of the land using a residual value approach
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