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nika2105 [10]
3 years ago
14

Three highly similar and competitive income-producing properties within two blocks of the subject property have sold this month.

All three offer essentially the same amenities and services as the subject property. The sate prices and estimated first-year NOI for each of the comparable properties are as follows. Using the information provided, calculate the overall capitalization rate by direct market extraction assuming each property is equally comparable to the subject. A. 11.0% B. 11.2% C. 11.4% D. 12.0%
Business
1 answer:
EastWind [94]3 years ago
4 0

The overall capitalization rate by direct market extraction assuming each property is equally comparable to the subject is 11.4%

Explanation:

Capitalization is the accounting of expenditures and the regular distribution of investments in fixed reserves over future years. Capitalisation, in other words, includes an expense usually documented in a temporary account and reported as an income account on a permanent basis.

Take the average of the three property capitalization rates to find the overall capitalization rate.

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Suppose that there are two independent economic factors, F1 and F2. The risk-free rate is 3%, and all stocks have independent fi
yarga [219]

Answer:

Rp = 3% + BP1 * 10.42% + BP2 * 6.1%

Explanation:

Portfolio A:

R_p = R_f + Beta1*Factor1 + Beta2*Factor2

32% = 3% + 1.6*F1 + 2*F2

Portfolio B

29% = 3% + 2.6*F1 - 0.2*F2

Solvig the equatios

3% = -F1 + 2.2*F2

F1 = 2.2F2 - 3%

F1 = 2.2F2 - 0.03

Substituting

29% = 3% + 2.6*(2.2F2 - 0.03) - 0.2F2

29% = 3% + 5.72F2 - 0.078 - 0.2F2

5.52F2 = 29% - 3% +0.078

5.52F2 = 0.26 +0.078

5.52F2= 0.338

F2 = 0.338/5.52 = 0.061

F1 = 2.2F2 - 0.03 = 2.2(0.061) - 0.03

    = 0.1042

The return Beta relationship in this economy  Rp = 3% + BP1 * 10.42% + BP2 * 6.1%

3 0
3 years ago
Annual interest rate 4.00%
oksian1 [2.3K]

Answer:

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Explanation:

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7 0
3 years ago
When determining whom might be affected by a business decision it is important to go beyond the obvious in identifying _________
GrogVix [38]

Answer: stakeholders

Explanation:

Stakeholders simply refers to an economic entity which could be an individual or an organization that is interested in a particular project or organization and can be impacted by the activities of such organization.

It should be noted that the main stakeholders in an organization are the investors, customers, the employees, and the suppliers. Therefore, the answer to the question is stakeholders.

6 0
3 years ago
From the dropdown box beside each numbered balance sheet item, select of its balance sheet classification.
Kamila [148]

Answer:

Balance Sheet Classifications:

                               Account Title                             Classification

1. Prepaid Rent       Prepaid Rent                              Current Assets

2. Equipment         Property, Plant, & Equipment    Plant Assets

4. Land                   Land                                            Long-term assets

5. Land                   Land                                            Long-term assets

6. Office Equipment  Property, Plant & Equipment Plant Assets

7. Common Stock  Common Stock                          Equity

8. Buildings                Property, Plant & Equipment Plant Assets

9. Bonds Payable      10-year Bonds Payable          Long-term Liabilities

10. Accumulated Depreciation -Truck                      Contra account to Long-term assets

11. Mortgages Payable  6-year Mortgages             Long-term liabilities

12. Automobiles           Automobiles                       Long-term assets

13. Notes payable        3-year Notes Payable         Long-term liabilities

14. Land                         Land                                    Long-term assets

15. Notes payable       2-month Notes Payable     Current liabilities

16. Notes Receivable  2-year Notes Receivable    Long-term assets

17. Interest Payable    Interest Payable                   Current liabilities

18. Long-term investment in stock                          Long-term investments

19. Wages Payable       Wages Payable                   Current liabilities

20. Office Supplies      Office Supplies                   Current assets

Explanation:

a) Current assets are short-term financial resources owned by the entity from which economic benefits will accrue.  They are mainly used as working capital to generate more revenue.

b) Long-term investments are investments in securities like bonds and stock held by the entity to generate interests and dividends.

c) Plant assets are property, plants, and equipment which are non current assets being used for the long-term in the running of the business, e.g. building.

d) Intangible assets are assets which are not physical in nature.  Examples of intangible assets are patents and copyrights, mining rights, and intellectual property.

e) Current liabilities are financial obligations of the entity which must be settled with financial resources within a calendar year or less.  Examples: Wages Payable, Accounts Payable, and Unearned Revenue.

f) Long-term liabilities are liabilities (financial obligations) which an entity settles with financial resources that can last for more than a calendar year.  Examples included Bonds, Notes, and other payables which are not current.

g) Equity refers to the ownership interest in an entity.  This is what the owners of the business are entitled when other creditors have been settled.  It is made of contributed capital and retained earnings.

7 0
3 years ago
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