A property is rented with rents collected at the end of each year. The rent for the coming year will be $23,500 to be collected in twelve month's time. The rent is expected to escalate at 3% per annum. The property is expected to be worth $533,043 at the end of 5 years.
Estimate the value of the property using a DCF model with a discount rate of 13%.
What is the value of the property to the nearest whole dollar?
This question is to be worked out on excel spreadsheet.