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Tems11 [23]
4 years ago
7

Jake is preparing a Comparative Market Analysis on a 5-year-old vacant two-story, 10,000-square foot office building on a one-ac

re property. Jake knows that a vacant lot next door of about the same size just sold for $100,000. He also knows that market value for comparable office space today would be $100 per square foot. The owner agrees with Jake that his building has experienced a yearly 3% depreciation of its value. What should Jake recommend as a selling price.
Business
1 answer:
Gre4nikov [31]4 years ago
4 0

Answer:

<em><u>The sale price would be $ 325,000</u></em>

Explanation:

Present value of the building= $ 100* 5,000=$ 500,000

( It is taken 5,000 square feet for 2 storey building)

Depreciation = 3/100* 500,000= $ 15,000

Depreciation for five years = $15,000* 5= $75,000

Sale Value of the same size building= $ 100,000

Average  value of the square foot was $20= $100,000/5,000 ( for 2 storey building)

Increase in Price is $ 80 * 5000= $ 400,000

Net Present Value= $4,00000- $75,000= $325,000

The market price or net present value which ever is higher is taken into consideration.

The sale price would be $ 325,000

You might be interested in
A publisher is deciding whether or not to invest in a new printer. The printer would cost $900, and would increase the cash flow
OLEGan [10]

Answer:

If the interest rate is 12% and the cash flow in year 1 is 500 and 800 in year 3 we will discount these 2 payments buy 12% and if the present value of these 2 payments is more than 900 than the investment is worthy

500/1.12=446.42+

800/1.12^3= 569.42

==1015.85

The present values of the cash flow (1015.85) are more than the initial investment (900) therefore the publisher should invest.

If the interest rate is 25% and the cash flows are 500 in year 1 and 800 in year 2 we need to discount these by 25% and see if the present value of the cash flows are more or less than 900 which is the initial investment.

500/1.25=400+

800/1.25^=512

=912

912 is the present value of cash flows which is more than the initial investment of 900 therefore the investment would have taken place.

Explanation:

3 0
3 years ago
Which type of insurance has flexible premium payments? A. automobile liability insurance B. earthquake insurance C. index univer
vlada-n [284]
The best answer here would be
C.) index universal life insurance.
With life insurance it's not required by the state, therefore, you get to choose a specific plan that fits your desire for payments.

6 0
4 years ago
UPS is successful in the small package delivery market. One important reason for this success is the concept of: a. non-bureaucr
anzhelika [568]

Answer:

bureaucracy

Explanation:

According to my research on business strategies, I can say that based on the information provided within the question UPS is successful because of bureaucracy. This is a system of administration that has a clear hierarchy of authority, rigid labor, and inflexible rules and regulations, which allowed UPS to cement itself as one of the most successful delivery companies in the World.

I hope this answered your question. If you have any more questions feel free to ask away at Brainly.

4 0
4 years ago
The Marx Company issued $98,000 of 8% bonds on April 1 of the current year at face value. The bonds pay interest semiannually on
Fed [463]

Answer:

$4,800

Explanation:

Interest Expense of the bond is calculated by multiplying Face value and Coupon rate. Any discount or premium is amortized over the life of the bond and added or deducted from the interest payment in order to record the interest expense.

As per given data

Face value of Bond = $80,000

Coupon Rate = 8%

Interest Expense = Face value x Coupon rate

As on July 1 interest of only 3 months has been accrued, so we will record the interest expense of 3 months only.  

On July 1

Interest Expense = $80,000 x 8% x 3/12 = $1,600

6 month period Expense will be recorded.

On December 31

Interest Expense = $80,000 x 8% x 6/12 = $3,200

Total Expense = $1,600 + $3,200 = $4,800

8 0
3 years ago
Veronica owns a home, and when her children went to college, she was looking for a way to help finance their education. She went
natali 33 [55]

Answer:

True

Explanation:

Home equity loan is a kind of loan in which a person borrows against the equity of his or her home, i.e the home is used as a collateral. The loan that can be gotten by the individual is dependent on the value of the home or residence and this value can only be determined by an appraiser from the institution providing the loan. In instances when the borrower is unable to repay the loan, the lending institution can foreclose on the home which has been used a collateral.

Home equity loan can be used to finance expenses like education bills, medical bills and so on.

Therefore, Veronica took a home equity loan to help finance her children's education.

4 0
3 years ago
Read 2 more answers
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