| John Williams wants to purchase an apartment complex. The complex consists of 75 units each renting for $700 per month. The estimated vacancy and collection loss rate is 7 percent. The insurance for the building is $40000 annually and taxes are $22000 annually. Utilities are $18000 and the maintenance expense is $29000. Assume a market cap rate of 11 percent. Recent sales of nearby apartment complexes have resulted in the following information. Characteristics Units Slope Coefficient in $per Unit Proximity to downtown In miles -350000 Vacancy rate Percentage - 50000 Building size Units + 75000 Williams’ proposed apartment complex is 4 miles away from downtown and has an estimated vacancy rate of 6 percent. |
Using the income approach, the value of Williams’ apartment complex is:（）
A. $5727273.
B. $4525455.
C. $4335455.