109. An office building with net operating income of $75,000 recently sold for $937,500. Financial
data for a comparable building that is currently on the market for sale is presented in the table
below.
Annual income or expense
Gross potential rental income $300,000
Estimated vacancy and collection losses 4%
Insurance and taxes $27,000
Utilities $14,000
Repairs and maintenance $21,000
Depreciation $15,000
Interest rate on proposed financing 7%
The estimated value for the building being sold using the income approach is closest to?
A. $2,825,000.
B. $2,975,000.
C. $3,228,500.
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