AN APARTMENT BUILDING CURRENTLY BEING MARKETED HAS THE FOLLOWING F...

50. - MOCK AND SAMPLE EXAMS CFA 2012 L1 SAMPLE EXAM V1 QUESTION
MOCK AND SAMPLE EXAMS CFA 2012 L1 SAMPLE EXAM V1 QUESTION
50. An apartment building currently being marketed has the following financial characteristics: Annual Figures Gross potential rental income $625,000 Estimated vacancy and collection losses 3.75% Insurance and taxes $65,000 Utilities $27,000 Repairs and maintenance $62,000 Depreciation $55,000 Interest rate on proposed financing 6.5% Average market cap rate 8.5% The estimated value for the building being sold using the income approach is closest to: A．$5,265,400. B．$5,541,200. C．$6,400,000.