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nikklg [1K]
3 years ago
15

Wanting to finalize a sale before year-end, on December 29, WR Outfitters sold to Bob a warehouse and the land for $125,000. The

appraised fair market value of the warehouse was $75,000, and the appraised value of the land was $100,000. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.)
Business
1 answer:
Sonbull [250]3 years ago
7 0

Answer:

What is Bob’s basis in the warehouse and in the land?

  • warehouse basis = $53,571
  • land basis = $71,429

Explanation:

since the total appraisal value was $75,000 + $100,000 = $175,000, we must allocate the basis using a coefficient = $125,000 / $175,000 = 0.714285

  • warehouse basis = appraised value x coefficient = $75,000 x 0.714285 = $53,571
  • land basis = appraised value x coefficient = $100,000 x 0.714285 = $71,429
  • total = $53,571 + $71,429 = $125,000 (total purchase price)

Since the transaction price was lower than the appraised value, we must adjust the basis for both the land and the warehouse in the same proportion.

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2 years ago
Video Planet (VP) sells a big screen TV package consisting of a 60-inch plasma TV, a universal remote, and on-site installation
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Answer:

1. The stand-alone price for installation service using adjusted market assessment is $180

2. The stand-alone price for installation service using expected cost plus margin is $182

3. The stand-alone price for installation service using residual is $182

Explanation:

1. According to the given data the market price at which similar vendors charge installation service should be taken as the stand-alone price which is $180

Therefore, The stand-alone price for installation service using adjusted market assessment is $180

2. The stand-alone price of the installation service using expected cost plus margin would be a follows:

Stan−alone price=Estimated Cost+Estimated margin

=$130+(40%×$130)

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Therefore, The stand-alone price for installation service using expected cost plus margin is $182

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8 0
3 years ago
A loan guaranteed with property is called?
tigry1 [53]

the name is mortgages

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3 years ago
Joe and Rich are both considering investing in a project that costs $25,500 and is expected to produce cash inflows of $15,800 i
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NPVRich= –$25,500 + $15,800 / 1.125 + $15,300 / 1.125^2

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Here Joe and Rich both invested a total amount of $25,500 and they are expected to get cash inflows of $15,800 and $15,300 in the year 1 and year 2 respectively they both has their own different rates of return i.e. 8.5% and 12.5% so we can calculate the net principle value of Joe is $2,058.88 and that of Rich is $633.33.

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