Market Overall Capitalization Rate & Interpretation With Decision-Making - Accounting Assignment Help

Assignment Task

Questions
Using an income approach, calculate the capitalization rate used for the purchase price for the subject  property. Comment on why the rate found might differ from the “market overall capitalization rate” as  stated in the Case Summary Sheet. 
As part of your answer to Question 1, provide calculations showing the net operating income for  the first six years of operation. Your spreadsheet should be formatted to facilitate interpretation and  decision-making by the client-investor group.  
Anticipating the need for testing sensitivity to changes in net operating income, build into your  spreadsheet the capability to automatically alter and recalculate the effect of different rental rates,  vacancy and collection loss allowances, and operating expenses. The optimal format is to have all inputs  in one area of your spreadsheet (e.g., in the top left corner) and then have all other numbers in the spread 
sheet created either by references to these data inputs or by formulas. If you create your spreadsheet in  this way, it will be straightforward to carry out sensitivity analyses, since all inputted data is found in  one place. The most important function of this assignment is to ensure that you are comfortable using  a spreadsheet, so that you will be better prepared for the analysis required in Project 2. By seeing the  formulas that you have developed, the marker should be able to provide feedback on any problems that  are apparent in your spreadshee
 

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