Problem:
A small shopping center is expected to produce net operating income of $23,880 in year 1. You expect NOI to increase by 4 percent per year over an expected holding period of seven years. Property value is expected to increase by 3 percent per year. The discount rate is 10 percent. Assume there will be no costs of sale.
Required:
Question: Estimate the value of the shopping center.
Note: Explain in detail.