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Hitman42 [59]
3 years ago
14

An investor is analyzing a three-unit property by looking at its ability to produce future income. What would most likely be use

d to determine this value?
Business
1 answer:
Monica [59]3 years ago
6 0

Complete/Correct Question:

An investor is analyzing a three-unit property by looking at its ability to produce future income. Which of the following would most likely be used to determine this value?

a. Effective gross income

b. Gross income multiplier

c. Gross rent multiplier

d. Potential gross income

Answer:

c, gross rent multiplier

Explanation:

Gross rent multiplier can be defined as the ratio of the price of a real estate investment to the annual income before the calculation of expenses.

It can simply be said to be the number of years it would take a property for pay for itself through rent collection.

Gross rent multiplier is very useful when deciding or trying to select properties to invest in to ensure that factors such as depreciation, periodical cost, etc affects the property/investment drastically.

in the case of the investor in the question above, gross rent multiplier will be used to determine what the future holds for the property.

Cheers

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Answer:

D) 5182 glass vases

Explanation:

<em>Contribution per glass vases:</em>

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<em>Operating income:</em>

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<em>Target income is to obtain a 20% increase:</em>

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<em>units needed for target income:</em>

(85,500 target income + 8,500 fixed cost) / 2.75 contribution per unit= 34.181,81

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3 0
3 years ago
Choose the best answer:
Juli2301 [7.4K]

Answer:

Option B is correct.

Explanation:

Option A is incorrect because the expected return must be greater than the marginal cost of the capital which means that the Net Present Value must be positive.

Option B is correct because the increase in cost of debt or capital would increase the weighted average cost of capital. This is because weighted average cost of capital is directly proportional to cost of capital sources.

Option C is incorrect because its not the cost of one of the capital sources, actually it is the weighted average cost of capital which when starts increasing at a point due to increase in the level of financing is known as breaking point.

So the only statement that is correct is option B.

Kindly don't forget to rate the answer. Thanks

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