Why should I choose AnalystNotes?
AnalystNotes specializes in helping candidates pass. Period.
Basic Question 4 of 8
Using the following data and the direct capitalization approach, an analyst estimates that the market value of an income-producing property is $2,750,000.
Annual property operating expenses = $100,000
Annual vacancy and collection losses = $50,000
B. 10.91%.
C. 12.73%.
Annual gross potential rental income = $400,000
Annual property operating expenses = $100,000
Annual vacancy and collection losses = $50,000
The capitalization rate used by the analyst to get the market value of the property is:
A. 9.09%.
B. 10.91%.
C. 12.73%.
User Contributed Comments 4
| User | Comment |
|---|---|
| Sandy69 | 250000/2750000 = .09091 |
| pooh2005 | 400000-100000-50000=250000 250000/5750000=.09091 |
| Oarona | pooh2005:You made a typo error in the denominator. it should be 2750000 instead of 5750000 |
| khalifa92 | eye of the tige |
I just wanted to share the good news that I passed CFA Level I!!! Thank you for your help - I think the online question bank helped cut the clutter and made a positive difference.
Edward Liu
Learning Outcome Statements
explain the investment characteristics of real estate investments
CFA® 2024 Level I Curriculum, Volume 5, Module 4.