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2 years ago

Some risks associated with investing in real estate are?

1 answer:

4 0

An investor must see what circumstances while investing in a real estate area. So the investor must be careful while investing.

One can loose tenant and his invested capital, tenant capital and fixed turnovers would be largely affected. increased property taxes and increased cost of operations a real estate investor is exposed to all these.

Some other risks associated with taking huge debts for investing in a property, liquidity risks , management risks, legislative risks, and environmental risks with several legal risks. It also include sometimes bad locations, negative cash flows etc.

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You might be interested in

The government regulates financial markets for two main reasons:

mart [117]

B. to improve control of monetary policy and to increase the information available to investors

C. To ensure that financial intermediaries do not earn more than the normal rate of return and to improve control of monetary policy

Hope this helped ;)

8 0

3 years ago

What is the present value of the following cash flows at a discount rate of 9 percent?

frutty [35]

Answer:

Year 1 PV = 91,743.12

Year 2 PV =126,251.99

Year 3 PV = 154,436.70

Explanation:

The present value of future sum is the amount that ought to be invested today at interest rate compounded annually to equal the sum at the end of a particular period.

The present value of a future sum is given as follows:

PV = FV × PV (1+r)^(-n)

PV - present value

FV - Future value

r- interest rate

n- number of years

Year 1 PV = 100,000× 1.09^(-1) =91,743.12

Year 2 PV = 150,000× 1.09^(-2) =126,251.99

Year 3 PV = 200,000× 1.09^(-3) = 154,436.70

4 0

3 years ago

Sophie, the cfo of slolum ski supplies, received a watch from one of her company's largest vendors, colorado ski shoppe. she rec

Gre4nikov [31]

The answer is "Whether the gift was reasonable in the circumstances."

The AICPA Code of Professional Conduct is a collection of arranged articulations issued by the American Institute of Certified Public Accountants that blueprint a CPA's moral and expert responsibilities. The code builds up benchmarks for evaluator autonomy, respectability and objectivity, duties to customers and partners and acts discreditable to the bookkeeping calling. The AICPA is in charge of drafting, overhauling and reissuing the code every year, on June 1.

8 0

3 years ago

A 15% increase in sales resulted in a 40% increase in net income for Company A and a 60% increase in net income for Company B. B

Ivahew [28]

company B has the greater operating leverage

What is operating leverage?

A cost-accounting method called operating leverage assesses how much a company or project can raise operating income by raising revenue. A company with significant operating leverage creates sales with a high gross margin and low variable costs.

The break-even point of a business is determined using operating leverage, which also aids in determining the right selling prices to cover all expenditures and make a profit.

Regardless of whether they sell any units of product, businesses with significant operational leverage must cover a bigger amount of fixed costs each month.

Low-operating-leverage businesses may have high variable costs that are directly related to sales, but they also have fewer monthly fixed expenses.

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3 0

1 year ago

Calculating Net Cash Flow from Operating Activities (Indirect Method) Lincoln Company owns no plant assets and reported the foll

qwelly [4]

Answer:

(a) Net Cash flow from operating activities = 115,000

(b) Net Cash flow from operating activities (NCOA) to current liabilities (CL) :

Current liabilities = 22000+9000 = 31000

NCOA to CL = 115,000/31000 = 3.71

Explanation:

Income Statement

Sales 750,000

Cost of Goods sold (470,000)

Gross profit 280,000

Wages expenses (110,000)

Rent expenses (42,000)

Insurance expenses (15,000)

Net Income 113,000

Cash flow Statement

Net Income 113,000

Cash flow from operating activities :

Increase in Receivables (54,000-49,000) (5,000)

Decrease in Inventories (66,000-60,000) 6,000

Increase in prepaid Insurance (8000-7000) (1000)

Increase in Accounts Payable (22000-18000) 4000

Decrease in wages payable (11000-9000) (2000)

Net increase in cash flow from Operating activities 115,000

5 0

3 years ago