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1 year ago

Thousands of developers, lenders, and investors were victims of deflation in commercial real estate beginning in the:?

1 answer:

7 0

Thousands of developers, lenders, and investors were victims of deflation in commercial real estate beginning in the 1980s and in 2007-2009.

Private property in the form of land and buildings is referred to as real estate. Real estate comprises all resources on the land, such as water and minerals, and can be used for residential, commercial, or industrial purposes.
Homes, workplaces, retail establishments, healthcare facilities, farms, and other structures are all instances of real estate. Real estate includes both the undeveloped area outside of our city and the road that takes us there. Due to the fact that the asset is tangible by nature, many individuals like working with and investing in it.

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If a gain of $7,600 results from selling (for cash) office equipment having a book value of $55,100, the amount reported in the

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The amount reported in the Cash Flows from (used for) Operating Activities section of the statement of cash flows using the indirect method is $7,600.

<h3>Cash flow from operating activities sections:</h3>

Based on the information given the amount that will be reported in the Cash Flows from (used for) Operating Activities section of the statement of cash flows using the indirect method is the gain amount of $7,600.

This gain is the gain from selling office equipment and this amount must be deducted from net income in the operating activities section of the statement of cash flows.

The reason why we have to deduct the $7,600 is because under accrual basis of accounting the amount represent a noncash addition to net income.

Inconclusion the amount reported in the Cash Flows from (used for) Operating Activities section of the statement of cash flows using the indirect method is $7,600.

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3 0

2 years ago

the property taxes on a house that Alan owns and rents out to have increased. to balance his monthly budget, he decides to incre

Allushta [10]

In this scenario the type of tax his tenants pay is called Indirect tax

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3 years ago

Read 2 more answers

Dan Watson started a small merchandising business in 2018. The business experienced the following events during its first year o

Jet001 [13]

Answer:

Horizontal statemtent:

Assets = Liabilities + Equity

1) 30,000 = 0 + 30,000

2) 18,000- 18,000 = 0 + 0

3) 17,000 = 0 + 17,000

Cash flow:

+30,000 Financing

Operating

collected from customer 32,000

paid to suppliers (18,000)

net 14,000

total cash flow 44,000

Income statment

sales revenue 32,000

COGS (15,000)

income 17,000

Total assets: 47,000 (44,000 cash + 3,000 inventory)

Explanation:

assets:

1) +30,000 cash from common stock

2) 18,000 inventory - 18,000 cash = 0 effect on total assets

3) 32,000 cash - 15,000 inventory = 17,000

total assets: 30,000 + 17,000 = 47,000

8 0

3 years ago

A developer is proposing to build and operate an 8 store strip mall. Each unit would rent for $3,500 per month. It is expected t

lys-0071 [83]

Answer:

Requirement A: CAP Rate is 12.5%

Requirement B: Capitalized Value of the Property is $1,884,960

Requirement C: Loan Amount is $1,413,720

Requirement D: Debt Service Coverage Ratio is 1.85

Requirement E: Loan per unit is $176,715 Per Unit

Explanation:

Requirement A: Find the CAP Rate

The CAP Rate will be calculated using the following formula:

CAP Rate = Annual Net Operating Income (NOI) (Step1) / Property Capitalized Value (Step2)

Here

Operating Income is $235,620 (Step1)

Property Capitalized Value (Step2)

Now, by putting values we have:

CAP Rate = $235,620 / $1,884,960 = 12.5%

Step1: Find Annual Net Operating Income (NOI)

As we know that:

Operating Income = Expected Revenue - Operating Expense

Here

Expected Revenue from 8 Strip Malls = Rent / Month * 12 Months * (1 - Vacancy Ratio) * 8 Strips Malls

= $3,500 * 12 * (1 - 15%) * 8

= $285,600

Operating Expenses = Expected Revenue * 17.5%

= $285,600 * 17.5% = $49,980

Now by putting value in the above Operating Income equation, we have:

Annual Operating Income = $285,600 - $49,980 = $235,620

Step2: Find Property Capitalized Value (It is also Requirement B)

Property Capitalized Value = Annual Operating Income / Minimum Accepted Rate of Return (MARR)

Here

Annual Operating Income is $235,620 from Step1

MARR is 12.5%

By putting values, we have:

Capitalized Value of the Property = $235,620 / 12.5% = $1,884,960

Requirement C. Find Loan Amount

It is given in the question that the Loan Amount is 75% of Property Capitalized Cost. This implies:

Loan Amount = $1,884,960 * 75% = $1,413,720

Requirement D. Debt Service Coverage Ratio

Debt Service Coverage Ratio (DSCR) = Annual Net Operating Income / Total Debt Service for the Year

Here

Annual Net Operating Income is $235,620 from Step1

Total Debt Service for the Year $127,235 (See Step3 below)

By putting values, we have:

Debt Service Coverage Ratio = $235,620 / $127,235 = 1.85

Step3: Total Debt Service for the year

Total Debt Service for the year = Loan Amount * Debt Service Rate

Here

Loan Amount is $1,413,720

Debt Service Rate is 9%

By putting values, we have:

Total Debt Service for the year = $1,413,720 * 9% = $127,235

Requirement E. Find Loan Amount

We can find loan per unit by simply dividing the loan amount by number of strip mall. Here total number of strip mall are 8. This implies that:

Loan Per Unit = $1,413,720 / 8 Units = $176,715 Per Unit

3 0

3 years ago

The net present value of a project is ______. the present value of the project’s projected annual tax savings the present value

d1i1m1o1n [39]

Answer:

Used in determining whether or not a project is an acceptable capital investment

The difference between the present value of cash inflow and cash outflow of a project

Explanation:

Net present value of a project is an investment appraisal tool that is used in determining the value of all future cash flow that will be generated by a project in order to know the project with maximum profit even right from the onset.

The is done by discounting the present and the future cash flow to the present value and the differences highlighted.

One of the key purpose of the net present value of projects is that it points out whether a project will be an acceptable capital investment or not. When the net present value of cash inflow is greater than the cash outflow, it is indicates a profitable project and vice versa.

8 0

3 years ago