Given the following information,calculate the going-out cap rate.Estimated holding period: 5 years,NOI for year 1: $120,000,NOI for year 5: $150,000,NOI for year 6: $155,250,Expected sale price: $1,350,000.

Question

Quizplus · Accepted Answer

The going-out cap rate can be calculated using the formula:

Going-out cap rate = (NOI in year 5 + (Expected sale price - NOI in year 5)/Holding period) / Expected sale price

= (150,000 + (1,350,000 - 150,000)/5) / 1,350,000

= 0.115, or 11.5%

Therefore, the answer is C, 11.5%.

Given the Following Information,calculate the Going-Out Cap Rate