Real Estate Principles 3rd Edition by David Ling,Wayne Archer

Exercise 23

Use the following information to answer questions 9 and 10. You have just completed the appraisal of an office building and have concluded that the market value of the property is $2,500,000. You expect potential gross income (PGI) in the first year of operations to be $450,000; vacancy and collection losses to be 9 percent of PGI; operating expenses to be 38 percent of effective gross income (EGI); and capital expenditures to be 4 percent of EGI. What is the implied going-in capitalization rate
A) 9.5 percent
B) 10.0 percent
C) 10.5 percent
D) 11.0 percent
E) 16.4 percent.