Question

g. The net income attributed or residual to the land is estimated to be $44,000. Land value is estimated to be stable. What is the value of the land if the yield rate is 8%

Answer 1

The amount of the Value of land will be $550,000.

The formula to use to derive the Value of land is {Annual estimated income from the land / Yield rate}

Given Information

Annual estimated income from the land = $44,000

Yield rate = 8%

Value of land = $44,000 / 8%

Value of land = $44,000 / 0.08

Value of land = $550,000

Hence, the amount of the Value of land will be $550,000.

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