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Elenna [48]
3 years ago
8

You are an employee of University Investment Consultants, Ltd. and have been given the following assignment. You are to present

an investment analysis of a new small residential income producing property for sale to a potential investor. The asking price for the property is $1,250,000; rents are estimated at $200,000 during the first year and are expected to grow at 3 percent per year thereafter. Vacancies and collection losses are expected to be 10 percent of rents. Operating expenses will be 35 percent of effective gross income. A 70 percent loan can be obtained at 11 percent interest for 30 years. The property is expected to appreciate in value at 3 percent per year and is expected to be owned for five years and then sold.a. What is the investor's expected before-tax internal rate of return on equity invested (BTIRR)? b. What is the first-year debt coverage ratio? c. What is the terminal capitalization rate? d. What is the NPV using a 14 percent discount rate? What does this mean? e. What is the profitability index using a 14 percent discount rate? What does this mean?
Business
1 answer:
Mars2501 [29]3 years ago
4 0

Answer:Answer and Explanation:

At the begining we have to calculate loan instalment.

Capital Installment = Loan/360 (12 month * 30 years)

Interest Installment = Balance from...

Explanation:Eliminating entries (including goodwill impairment) and worksheets for various years on january 1, 2013, porter company purchased an 80% interest in the capital stock of salem company for$850,000. at that time, salem company had capital stock of $550,000 and retained earnings of $80,000.differences between the fair value and the book value of the identifiable assets of salem company were asfollows: fair value in excess of book valueequipment$130,000land65,000inv entory40,000the book values of all other assets and liabilities of salem company were equal to their fair values onjanuary 1, 2013. the equipment had a remaining life of five years on january 1, 2013. the inventory was sold in2013.salem company’s net income and dividends declared in 2013 and 2014 were as follows: year 2013 net income of $100,000; dividends declared of $25,000year 2014 net income of $110,000; dividends declared of $35,000required: a. prepare a computation and allocation schedule for the difference between book value of equity acquired andthe value implied by the purchase price. b.present the eliminating/adjusting entries needed on the consolidated worksheet

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Sally has invested $10,000 now and wants to earn a real interest rate of 10% per year. Assume that the inflation rate is 7% per
hodyreva [135]

Answer:

Results are below.

Explanation:

Giving the following information:

Inflation rate= 7%

Real rate of return= 10%

Present value (PV)= $10,000

Number of periods (n)= 10 years

<u>The real rate of return incorporates the effect of the inflation rate. Therefore, the nominal rate of return:</u>

Nominal rate of return= 0.1 + 0.07= 17%

<u>To calculate the Future Value, we need to use the following formula:</u>

FV= PV*(1 + i)^n

FV= 10,000*(1.17^10)

FV= $48,068.28

This is the n<u>ominal valu</u>e received after ten years.

<u>If Sally wants to determine the real value of the investment after 10 years, we must use the real rate of return:</u>

<u></u>

FV= 10,000*(1.1^10)

FV=$25,937.42

4 0
3 years ago
A local distributor for a national tire company expects to sell approximately 9,530 tires of a certain size and tread design nex
Dahasolnce [82]

Answer:

the economic order quantity is 313 units

Explanation:

The computation of the economic order quantity is shown below:

= sqrt( 2 ×annual demand × ordering cost)  (carrying cost)

= sqrt(2 × 95,30 × $72) ÷ $14

= 313 units

hence, the economic order quantity is 313 units

The same should be considered and relevant

4 0
3 years ago
Dallas Company uses a job order costing system. The company's executives estimated that direct labor would be $3,360,000 (240,00
makkiz [27]

Answer:

Estimated manufacturing overhead rate= $6.42 per direct labor hour

Explanation:

Giving the following information:

The company's executives estimated that direct labor would be $3,360,000 (240,000 hours at $14/hour) and that factory overhead would be $1,540,000 for the current period.  

Using direct labor hours as a base, what was the predetermined overhead rate?

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Estimated manufacturing overhead rate= 1,540,000/240,000= $6.42 per direct labor hour

5 0
3 years ago
Describe at least four factors that affect the demand for a particular commodity.
MrMuchimi

Answer with Explanation:

There are so many factors affecting the demand for a particular commodity. Four of these are: the price of the complements, the income of buyers, changes in trend and advertisements.

1. The price of the complements - Some commodities are complementary with each other, just like cars and gas. If the <em>price of cars decreases</em>, then many people will purchase their own cars, which also follows that <em>the demand for gas will increase.</em>

2. The income of buyers - If the income of a person increases, then he will most likely purchase a particular commodity because he can afford it and has an extra money to purchase goods.

3. Changes in trend - Many people purchase goods because they're on trend. For example, if flare pants are fashionable this year, then the demand for it will increase. Once they're no longer on trend, the demand will drop.

4. Advertisements - The more advertisements a company spends on, the more likely buyers will purchase a specific commodity.

5 0
3 years ago
Goods that are created and used domestically are __________.
dem82 [27]
The answer is C. Produced and consumed in one country. 
Goods that are created and used domestically are not imported goods because imported goods means coming from other country, it's not also exported goods since it is not exported to other county. Rather it is being produced and used of the same country.
7 0
3 years ago
Read 2 more answers
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