Answer:
The estimated value of the warehouse is $232,333
Explanation:
For computing the estimated value of the warehouse, the following calculations is required which is shown below:
= Gross income - vacancy rate - yearly maintenance - yearly taxes - yearly reserves ÷ capitalization rate
where,
Gross income is $36,000
Vacancy rate is = $36,000 × 2% = $720
Yearly maintenance = Monthly maintenance × Number of months in a year
= $300 × 12
= $3,600
Yearly reserves = Quarterly reserves × Number of quarters in a year
= $450 × 4
= $1,800
Yearly taxes = $2,000
So, the value equal to
= $36,000 - 720 - $3,600 - $1,800 - $2,000 ÷ 12%
= $27,880 ÷ 12%
= $232,333
The other cost is ignored because it is not related to the computation part.
Hence, the estimated value of the warehouse is $232,333
