Answer:
BOB should offer 4,583,333 for the building if he wants the cap rate to be the same as the similar building.
Explanation:
The cap Rate is used to to calculate how much income a building or a property generates compared to its price it is bought at, so in order to find the cap rate we divide the annual NOI by it's price. In this question we will have to calculate the cap rate of the similar building which was sold for 6,000,000 and then use that cap rate to find what should the price of the building be that BOB wants to buy.
Cap rate = Annual NOI/Price
Cap rate of similar building = 360,000/6,000,000=0.06=6%
Now we will substitute 6% in the formula to find the price of the building BOB wants to buy.
0.06=275,00/Price
Price = 275,000/0.06=4,583,333
Answer:
The gross profit margin for the year ended December 31, 2021 is 58,57%.
Explanation:
As per given information:
2021
Net Sales = $1,680,000
Net Income = $104,000
Operating expenses = $880,000
Net Income = Gross Income - Operating Expenses
$104,000 = Gross Income - $880,000
Gross Income = $104,000 + $880,000
Gross Income = $984,000
Gross Profit Margin = ( Gross income / Net sales ) x 100
Gross Profit Margin = ( 984,000 / 1,680,000 ) x 100
Gross Profit Margin = 58.57%
Answer:
A. A market failure caused by an externality
Explanation:
An externality is a term in economics that refers to a cost or benefit received by a third party. However, the third party has no control over the creation of that cost or benefit. In this case the lung cancer is developed because of smoke generated by a third party.
Answer:
Controllable margin =$125,000
Return on investment = 20%
Explanation:
<em>Controllable margin is the difference between the sales revenue and the controllable cost. Controllable costs include variable and fixed cost directly under the control of the manager and which are influenced by his decisions.</em>
Controllable margin - Sales revenue - variable cost - controllable fixed cost
Controllable margin= $500,000 - $300,000 - 75,000 = $125,000
Controllable margin =$125,000
Return on investment = (controllable margin/ Average investment) × 100
= (125,000/625,000) × 100 = 20%
Return on investment = 20%
Answer:
The answer is <u>"2.04%".</u>
Explanation:
Purchase price = $490,000
Selling price = $500,000
Percentage return on his investment = ?
Return on investment = Profit / Purchase price
Profit = Selling price − Purchase price
Return on investment = (Selling price − Purchase price) / Purchase price
= ($500,000 - $490,000) / $490,000
= $10,000 / $490,000
= 0.0204
To find percentage, multiply it with 100;
0.0204 x 100 = 2.04%
Thus the percentage return on his $490,000 investment = <u>2.04%</u>