Ms Kline Estimates That a Commercial Building She Is Thinking

Ms. Kline estimates that a commercial building she is thinking of purchasing has gross potential income of $47,000 and a vacancy rate of 7%. She estimates that the operating costs are $25,000 per year and a nearby property with an NOI of $7,500 just sold for $65,000. What is the estimated value of this building?

A) $65,000
B) $162,153
C) $163,932
D) $165,393
E) $1,639,320

Correct Answer:

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