1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
harina [27]
3 years ago
11

A property valued at $350,000 has an annual net operating income of $43,750. What is the capitalization rate?

Business
1 answer:
Zinaida [17]3 years ago
5 0

<u>Answer:</u> The capitalization rate is 12.5 %

<u>Explanation:</u>

To calculate the capitalization rate, we use the formula:

\text{Rate of capitalization}=\frac{\text{Income}}{\text{Value of property}}\times 100

We are given:

Net operating income = $ 43,750

Value of property = $ 350,000

Putting values in above equation, we get:

\text{Rate of capitalization}=\frac{43,750}{350,000}\times 100\\\\\text{Rate of capitalization}=12.5\%

Hence, the capitalization rate is 12.5 %

You might be interested in
Would Davidson Masonry automatically be taxed as a partnership or a corporation? Is Davidson Masonry member managed or manager m
vichka [17]

Answer: The answers are provided below.

Explanation:

In Papagos Arizona, a deteriorating bridge on a prominent public roadway needed a repair. The city posted notices seeking proposals for an artistic bridge design and reconstruction. Davidson Masonry, LLC owned and managed by Carl Davidson and his wife - Marilyn Rowe, decided to submit a bid for a decorative concrete project that incorporated artistic metalwork. They contacted Shana Lafayette, a local sculptor who specialized in large-scale metal forms, to help them design the bridge. The city selected their bridge design and awarded them the contract for a commission of $184,000. Davidson Masonry and Lafayette then entered into an agreement to work together on the bridge project. Davidson Masonry agreed to install and pay for concrete and structural work, and Lafayette agreed to install the metalwork at her expense. They agreed that overall profits would be split, with 25 percent going to Lafayette and 75 percent going to Davidson Masonry. Lafayette designed numerous metal sculptures of salmon that were incorporated into colorful decorative concrete forms designed by Rowe, while Davidson performed the structural engineering. The group worked together successfully until the project was completed. Using the information presented in the chapter, answer the above question.

1. Would Davidson Masonry automatically be taxed as a partnership or a corporation?

2. Is Davidson Masonry member managed or manager managed?

3. When Davidson Masonry and Lafayette entered an agreement to work together, what kind of special business form was created? Explain.

4. Suppose that during construction, Lafayette had entered into an agreement to rent space in a warehouse that was close to the bridge so that she could work on her sculptures near the site where they would eventually be installed. She entered into the contract without the knowledge or consent of Davidson Masonry. In this situation, would a court be likely to hold that Davidson Masonry was bound by the contract that Lafayette entered? Why or why not?

1. A limited liability company will be taxed as a partnership unless the firm declares that it wants to be taxed as a corporation. A limited liability company that has at least two members can either choose to be taxed as a partnership or as a corporation.

In this case, the parties involved haven't declared to be taxed as a corporation, therefore they'll be taxed as a partnership.

2. Most states assume that a limited liability company is manager managed unless when it's otherwise stated by the articles of the organization. However, in this case, the text said that Davidson Masonry, was owned and managed by both members and since all the members of the LLC participates in management, then Davidson Masonry was member managed.

3. The kind of special business formed is a joint venture. Masonry and Lafayette then entered into an agreement to work together on the bridge project. Davidson Masonry agreed to install and pay for concrete and structural work, and Lafayette agreed to install the metalwork at her expense. They agreed to share the profit by ratio of 75% to 25%.

Joint Venture is a kind of business that is formed when two businesses combine their resources together and meet their different skill set in order to achieve a common business objective.

4. Joint venture possesses less power to bind members underlying the venture when compared to partnership. In this scenario, Lafayette had entered into an agreement to rent space without the knowledge or the consent of Davidson Masonry.

Based on this, Davidson Masonry is bound on the contract that Lafayette enters based on the principles of joint venture as both the members will be held liable for the agreement concerning the warehouse space.

4 0
3 years ago
Monette has posted over 100 book reviews on amazon.com. she also frequently reviews products and services on epinions and posts
Svetach [21]
<span>As a social media user, Monette would best be characterized as the "Critic".
There are seven types of Social media user:
the creator, the conversationalist, the critic, the collector, the joiner, the spectator and the inactive.
Each user have their own functions. Critic refers to</span><span> the person who answers and responds to content that are posted by others, they also post reviews and comments about the products and services.</span>
4 0
3 years ago
Let's say there's a company that can fully tax deduct the interest on its loans. If this company borrows more, then the discount
umka21 [38]

Answer:

High

Low

Explanation:

When a company borrows funds it has opportunity to avail tax shield on the interest amount of the borrowing fund. If the company borrows more fund then the discounted value of tax shield will increase while the financial distress cost will decrease.

5 0
3 years ago
Bonita is considering changing jobs and plans to roll over the vested portion of her qualified retirement plan into either an IR
jasenka [17]

Answer:

a) II only

Explanation:

Bonita is planning to join the new company because there is an availability of getting a loan from the company. Unlike her previous employer, the new employer has different packages for employees such as retirement plans as well as the available of loans for employee. Therefore, it can be concluded that the correct option is a.

6 0
3 years ago
Morgan Company issues 9%, 20-year bonds with a par value of $750,000 that pay interest semiannually. The amount paid to the bond
Digiron [165]

Answer: $33750

Explanation:

First and foremost, we have to calculate the interest paid for the year which will be:

= $750000 X 9%

= $750000 × 0.09

= $ 67500

Therefore, the semi annual payment will them be calculated as:

= $67500 / 2

= $33750

7 0
2 years ago
Other questions:
  • On July 1, Shady Creek Resort borrowed $340,000 cash by signing a 10-year, 9% installment note requiring equal payments each Jun
    14·1 answer
  • If a nation is going to achieve and sustain a high rate of economic growth, it must prohibit low-wage foreign producers from sup
    8·2 answers
  • Suppose the demand for corn increases while at the same time the supply of corn also increases. As a result, the equilibrium pri
    13·1 answer
  • Luke's Express Diner is the only place that sells burgers in a remote town in Arizona. As one of the​ long-time residents of the
    13·1 answer
  • Not all goods are normal goods. If the demand for a good rises when income falls, the good is called an ________ ________. An ex
    11·1 answer
  • Alice purchased office furniture on September 20, 2018, for $100,000. On October 10, 2018, she purchased business computers for
    12·1 answer
  • Mister Jones was selling his house. The asking price was $220,000, and Jones decided he would take no less than $200,000. After
    11·1 answer
  • Monty has launched a company with the help of crowdfunding. He wants to secure the computer algorithm that he uses in his primar
    8·1 answer
  • Music Masters sells a unique assortment of sheet music including just about any published music ever written before 1970. Its cu
    14·1 answer
  • Burrows, Inc. borrowed $100,000 from Last Bank by signing a formal agreement to repay the bank in 10 years. Burrows' journal ent
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!