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QUESTION 3 Year 1 Year 2 Year 3 NOI $72,000 $74,880 $77,875 DS 60,000...

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Finance

QUESTION 3

Year 1 Year 2 Year 3

NOI $72,000 $74,880 $77,875

DS 60,000 60,000 60,000

Cash flow $12,000 $14,880 $17,875

Resale in year 3 900,000 Less mortgage balance -435,000

Total cash flow $12,000 $14,880 $482,875

Present value of cash flow @ 15%=

$10,435 $11,251 $317,498

Using the information from the question above, what would be the equity dividend rate?

A.) 2.4 percent

B.) $12,000

C.) $317,498

D.)3.5 percent

E.) Not enough information

The estimated property value from the previous question was $794,200.

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