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eduard
3 years ago
5

A property is being appraised using the income capitalization approach. Annually, it has an estimated gross income of $48,000, v

acancy and credit losses of $3,600, and operating expenses of $15,000. Using a capitalization rate of 8%, what is the property’s value (rounded up to the nearest $1,000)?
Business
1 answer:
lions [1.4K]3 years ago
4 0

Answer:

$368,000

Explanation:

In order to appraise the property using the capitalization approach, we must first determine a net cash flow:

net cash flow = $48,000 - $3,600 - $15,000 = $29,400

Now we calculate the property value using the perpetuity formula:

property value = net cash flow / capitalization rate = $29,400 / 8% = $367,500 which we must round up to $368,000

A property is being appraised using the income capitalization approach. Annually, it has an estimated gross income of $48,000, vacancy and credit losses of $3,600, and operating expenses of $15,000. Using a capitalization rate of 8%, what is the property's value (rounded up to the nearest $1,000)?

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Net income increases when: Group of answer choices fixed costs increase. depreciation increases. the average tax rate increases.
worty [1.4K]

Net income increases when "revenue" increases.

<h3>What is revenue?</h3>

The overall revenue generated by a business over a predetermined period of time. This can be done by-

  • The entire income generated by a specific source, such as a property with high predicted yearly returns.
  • The total income a financial investment generates.
  • The amount of revenue that a political entity, such as a country or state, collects and deposits into the treasury for use by the general public.
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  • A company's earnings, or bottom line, will be lower than its sales because revenues do not take expenditures or expenses into account.

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5 0
2 years ago
The Economy Tomorrow Suppose a country’s GDP is $10 billion and the population is 2 million this year.
Sphinxa [80]

GDP per capita for this year is $5000

GDP per capita for next year  is $4760

GDP per capita for next year is $5100

<h3>What is the GDP per capita?</h3>

GDP per capita is the gross domestic product of a country divided by the total population of that country.

GDP per capita = GDP / population

GDP per capita for this year = $10 billion / 2 million = $5000

GDP per capita for next year  = $10 billion / ( 2 x 1.05) = $4760

GDP per capita for next year = (10 billion x 1.03) / ( 2 x 1.01) = $5100

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8 0
2 years ago
Bill’s Surf Shop needs to advertise. Which option provides the largest frequency? a. direct mail b. TV c. the Web d. billboards
ad-work [718]

Answer:

TV (television)

Explanation:

Advertising frequency is defined as the number of time an advert is viewed by individuals once it come online.

The higher the number of times a user is exposed to an advert in a given time frame the higher the advertising frequency.

Normally it take exposure of 5 times and above for an advertisement to be effective.

Bill’s Surf Shop will have more advertising frequency on television because all categories of customers watch the television. Including children, teenagers, middle aged, and older people.

The other mediums will attract less people. Direct mail is only for those with emails, the web is for technologically savvy clients, and billboards only for those that view them in their location.

Television gives a larger audience.

3 0
2 years ago
The Nichols Company uses the weighted-average method in its process costing system. The company recorded 29,500 equivalent units
siniylev [52]

Answer:

23,000 units

Explanation:

Beginning WIP inventory + Units started into production = Ending WIP inventory + Units completed and transferred out

Units started into production = Ending WIP inventory + Units completed and transferred out - Beginning WIP inventory

= 6,000 + 25,000 - 8,000 = 23,000

7 0
3 years ago
The income statement for the year 2015 of Fugazi Co. contains the following information: Revenues$70,000 Expenses: Salaries and
ahrayia [7]

Answer:

$0

Explanation:

When the closing entries are recorded, so the net profit or net loss would be transferred to the retained earning account with the help of the closing entries

Therefore after closing entries posting, the balance in the income summary account would be zero and the same is to be considered

hence, the balance would be zero

4 0
2 years ago
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