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AleksAgata [21]
4 years ago
15

"Bob wants to buy a building. He computes the annual NOI for the following year to be $275,000. The seller s asking price for th

e building is $5,000,000. Bob finds a similar building nearby which sold for $6,000,000 last year and had an NOI of $360,000. If Bob thinks the building he wants to buy should sell at the same cap rate as the similar building, how much should Bob offer?"
Business
1 answer:
Lemur [1.5K]4 years ago
4 0

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

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dolphi86 [110]

Answer:

B. A receipt.

Explanation:

A receipt is normally given to the person after he or she purchased something, in case if the person wants a refund or etc he can use the receipt for evidence to be able to do so.

5 0
3 years ago
Companies choose to Vertically Integrate for all of the following reasons, except____________.a. The company can perform the pro
QveST [7]

Answer:

The correct answer is letter "D": The company desires to enter new markets.

Explanation:

Vertical integration happens when a corporation buys other companies in the supply chain and manages them. There are two types of vertical integration: <em>backward </em>and <em>forward</em>. In backward vertical integration a corporation, like a manufacturer, owns companies that supply inputs to the manufacturing process for businesses.  

In forward vertical integration, a business owns another company in the supply chain to get closer to the end customer.

Thus, <em>vertical integration is not a technique companies use to enter new markets.</em>

8 0
3 years ago
Lucy will open a checking account and 3 savings accounts for different purposes (emergency fund, gift fund, and education fund).
Bess [88]

The item that should not be among Lucy's main considerations in selecting these accounts are that the account recommended for somebody with different needs.

<h3 /><h3>What is checking account?</h3>

A transaction account is a deposit account kept at a bank or other financial institution. It is also known as a checking account, checking account, current account, request deposit account, or shared draft account at credit unions.

In the above situation, Lucy will have to pay the amount of interest to be on deposits, and eligible to any advantages of having all the accounts at the same bank.

Lucy will also bear the fees for having multiple savings accounts, as having a multiple accounts increases the fees of all the accounts.

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Therefore, option A is correct.

Learn more about the checking account, refer to:

brainly.com/question/20984186

8 0
2 years ago
Received $13,000 cash from the issue of common stock. Performed services on account for $45,000. Paid the utility expense of $1,
kirill115 [55]

Answer:

Please see explanation

Explanation:

The transactions shall be recorded in the general ledger in the following way:

                                                                   Debit                      Credit

Cash                                                          $13,000

Common stock                                                                           $13,000

(Received $13,000 cash from the issue of common stock)

Accounts receivable                                $45,000

Revenue                                                                                      $45,000

(Performed services on account for $45,000)

Utility expense                                          $1,100

Cash                                                                                             $1,100

(Paid the utility expense of $1,100)

Cash                                                          $33,000

Accounts receivable                                                                   $33,000

(Collected $33,000 of the accounts receivable)

Salaries expense                                      $6,250

Salaries payable                                                                          $6,250

(Recorded $6,250 of accrued salaries at the end of the year)

Retained Earnings                                    $1,000

Cash                                                                                              $1,000

(Paid a $1,000 cash dividend to the stockholders)

6 0
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3 years ago
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