Little question regarding AI and NAVPS - Pg 106 - Eg 6

CFA Level II
#1

Usually I have NAV = NOI/Cap rate + Assets - Liabilities

everything at market values in the calculations, dont include goodwill, deferred taxed, deferred financing.

In Eg 6, Question 2 - They give the Book Value of Properties and dont include it. If it was the Market Value of Properties would it be included?

Reason I’m confused is essentially we’re valuing REITS/REOCS so would Investment properties be included or any type of properties?

Also in the solution it says, A is incorrect because it says the Book Value of Properties and nothe Book value of Net Assets. Even if it was Net assets, I still wouldn’t include it. You can see that in the second paragraph of the solution to 2.

Thanks…This site has been a lifesave…

#2

NOI/Cap rate = market value of fixed assets (properties) so you do not include them again. Book Value is not good because it’s historical value.

#3

THanks…Logic…Thanks again…