All categories

3 years ago

As a component of real estate value, the principle of substitution suggests that_________.

Business

1 answer:

melisa1 [442]3 years ago

3 0

Answer:

If two similar properties are for sale, a buyer will purchase the cheaper of the two

Explanation:

This principle states a property's maximum value is usually determined by the cost of purchasing an equivalent substitute property having the same usage, design, and income.

For instance, why would someone pay $1,000,000 for an apartment when they could buy a different but equally desirable house for just $750,000 in the same area?

You might be interested in

A man with $20,000 to invest decides to diversify his investments by placing $10,000 in an account that earns 5.2% compounded

Fynjy0 [20]

Answer:

9.749 years

Explanation:

Given that :

Principal, P = 20,000

Total investment A = 35000

Investment 1:

P = $10,000

Compounded continuously at r = 5.2% = 0.052

A = Pe^rt

Investment B:

P = $10,000

Compounded annually at r = 6.4% = 0.064

A = P(1 + r)^t

Hence, final amount, A on both investment = 35000

A = Pe^rt + P(1 + r)^t

35000 = 10000e^0.052t + 10000(1 + 0.064)^t

Divide through by 10000

3.5 = e^0.052t + 1.064^t

t = 9.749123

t = 9.749 years

8 0

3 years ago

Aggregate supply (as) denotes the relationship between the __________________ that firms choose to produce and sell and the ____

kondor19780726 [428]

Aggregate supply (as) denotes the relationship between the total quantity that firms choose to produce and sell and the price level of the output, holding the price of inputs fixed. Aggregate supply is the total supply of services and goods that identifies the economy plan of a nation in a specific period of time.

5 0

3 years ago

Mr. G obtains a $70,000 loan today. He will repay the bank with equal payments to be made at the end of each 6-month period, or

g100num [7]

Answer:

The amount of each payment after every 6 months will be $7,458

Explanation:

We need to find the amount of payment made every 6 months. For that we need to know the present value of the loan which is 70,000, the interest rate which is 8% but we will divide it by 2 because there are semiannual payments so interest rate will be 4%, after that we need to know the number of compounding periods, because the payments are semi annual and there are 6 years we will multiply 6 by 2 and get 12 which is our compounding periods. Because there are equal payments and no payment to be made at end the future value of the loan is 0. Now we will input the following data in a financial calculator.

PV= 70,000

I= 4

N= 12

Fv=0

Compute PMT=7,458

3 0

3 years ago

The Great Giant Corp. has a management contract with its newly hired president. The contract requires a lump sum payment of $25

denis23 [38]

Answer:

$1,852,617.25

Explanation:

Whe need to know the annuity per year to generate a future value of 25,000,000 after 10 years at the given rate of 6.5%

$FV \div \frac{(1+r)^{time} -1 }{rate} = C\\$

FV 25,000,000.00

time 10

rate 0.065

$25,000,000 \div \frac{(1+0.065)^{10} -1}{0.065} = C\\$

C $ 1,852,617.251

4 0

4 years ago

Identify and describe the purpose of the 3 types of employment forms.

Lilit [14]

Answer: Employee, worker and self-employed.

Explanation: An employee is an individual who has entered into or works (or worked) under the terms of a contract of employment.

A Worker A worker who is not an employee works under a contract whereby the individual.

A self-employed is the state of working by themself not as a employee .

5 0

3 years ago

Read 2 more answers