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kumpel [21]
3 years ago
11

James purchased a commercial property at a 7.5% cap rate. The previous owner agreed to finance the deal at 8%. Why may James ele

ct not to go ahead with the financing?
Business
1 answer:
dlinn [17]3 years ago
7 0

Answer:

James will lose money, since his earnings will be lower than the interest that he must pay.

Explanation:

The capitalization (cap) rate is a ratio calculated by dividing the net operating income over the property asset value.

For example, if James is purchasing the property at $100,000, his net earning will be $7,500 per year (cap rate of 7.5%), but he will have to $8,000 in interests for the property. The interests are higher than the earnings, therefore the leverage is negative.

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Identify and briefly compare the two leading stock exchanges in the United States today. Write the main differences of the two s
gulaghasi [49]

Answer:

The two main leading stock exchanges in the United States are the New York Stock Exchange (NYSE) and the Nasdaq stock market. The NYSE is bigger than the Nasdaq, and it is a physical location exchange where traders meet to buy and sell securities. While the Nasdaq is an electronic dealer based exchange where brokers and dealers are connected electronically.

5 0
3 years ago
The U.S. government agency that advises and assists small businesses by providing management training and financial advice and l
Paraphin [41]

A U.S. government agency that works to assist small businesses is called the Small Business Administration(SBA).

<h3>What does the Small Business Administration do?</h3>

The Small Business Administration was established under the Eisenhower tenure in order to boost the nation's economy.

They work to help small businesses by offering them several types of support such as management training and loans.

Find out more on the Small Business Administration at brainly.com/question/13424073.

#SPJ1

7 0
1 year ago
Dmitri recently lost his job as a waiter at a local restaurant. A recent increase in the minimum wage keeps local employers from
Lelechka [254]

Answer:

B. FALSE

Explanation:

This economy is currently at its natural rate of unemployment because there is <u>no cyclical unemployment</u>

In macroeconomics, <u>full employment is the level of employment rates where there is no cyclical or deficient-demand unemployment. </u>

<u>The economy is considered to be at full employment when the actual unemployment rate is equal to the natural rate</u>.

Hence, it is false to allege that the economy in the given scenario is not currently at its natural rate of unemployment

7 0
2 years ago
Kosher Pickle Company acquires all the outstanding stock of Midwest Produce for $15.0 million. The fair value of Midwest's asset
JulsSmile [24]

Given Information:

Fair value of consideration paid = $15 million

Fair value of Midwest's assets=$11.9 million

Fair value of  Midwest's liabilities=$1.7 million

Required Information:

Amount paid for goodwill = ?

Answer:

Amount paid for goodwill = 4.8 million

Explanation:

The amount of goodwill can be calculated by

Amount of goodwill = Fair value of consideration paid - Fair value of net identifiable assets

The Fair value of net identifiable assets is found by

Fair value of net identifiable assets = Fair value of Midwest's assets - Fair value of Midwest's liabilities

Fair value of net identifiable assets = 11.9 - 1.7

Fair value of net identifiable assets = 10.2 million

Therefore, the amount paid for goodwill is

Amount paid for Goodwill = 15 - 10.2

Amount paid for Goodwill = 4.8 million

7 0
2 years ago
There is low interdependence, performance ambiguity, and costs of control in firms pursuing Multiple Choice a localization strat
amm1812

Answer:

Option A (localization strategy) is the right approach.

Explanation:

  • Localization strategy seems to be a method of transforming services or products to something like a unique language, culture as well as the appropriate "look-and-feel" community.
  • Preferably a good or product is designed such that it is fairly sufficient to accomplish this strategy. And it is, therefore, possible to obtain an internationalized products.

Certain options given aren't relevant to the contexts in question. So choice A is indeed the correct way to do things.

8 0
3 years ago
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