Finance - Real State

This quiz will help to ensure that you are keeping up with this class.  You should have read Module 4, and have a financial calculator before starting the quiz.  You will have only one chance to take the quiz and just 15 minutes to answer all five (5) questions.  Write down the following problem and calculate annual cash flows and sale price before starting:

An investor is considering the purchase of an office building for $3 million.  The 24,000 square foot property rents for $18 a foot with 5% annual rent escalation, a 5% vacancy rate, and operating expenses at 35% of EGI.  Assume a 5 year holding period, and a terminal cap rate of 10% with sales expenses of 5%.