Abstract
This article provides a proof of value for two lodging-property investment-value models presented by the authors in the December 1995 Cornell Quarterly (Volume 36, Number 6; pp. 62-69). Those models allow one to study the effects of two distinct lender-underwriting criteria: the loan-to-value ratio and the alternative debt-service-coverage ratio. The proofs verify the accuracy of those models and demonstrate the ability of the models to produce accurate, useful estimates. The proof is structured as a net-present-value problem that solves for value given the other input values (from the previous article).
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