Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. 4. (10 points) valuation using income approach an

4. (10 points) Valuation using Income Approach An appraiser appraises a food court and lounge...

50.1K

Verified Solution

Question

Accounting

image

4. (10 points) Valuation using Income Approach An appraiser appraises a food court and lounge and provides the following assessment: o O The building consists of 2 floors with the following (6) properties: 1st floor (3) fine dining restaurants: (1) - Charles Mulligan's Steakhouse - rents for $3250/month (2) - Tom's Bistro - rents for $2400/month 2nd floor (1) bar/lounge and (2) fast food joints (same company) Snakehole Lounge - rents for $3200/month (2) Paunch Burgers (fast food) - rents for $1200/month Vacancy and Collection Losses: 6% per year Miscellaneous Income: $1550 per year Operating expenses: 30% per year Capital expenditures: 6% per year a) What is the estimated Potential Gross Income (PGI)? b) What is estimated Effective Gross Income (EGI)?| c) What is the estimated Net Operating Income (NOI)? d) Suppose the average overall capitalization rate for the comparable properties is 7.65%. What is the indicated value of the subject property using the cap rate? e) Now suppose this is a small income-producing property and the average Effective Gross Income Multiplier (EGIM) for the comparable is 8.64. What is the indicated value using the EGIM

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students