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4 years ago

A building owner is evaluating the following alternatives for leasing space in an office building for the next five years:

Business

1 answer:

Leno4ka [110]4 years ago

4 0

Answer:

Explanation:

The lease rent that depends upon CPI rate and operating expenses has more risk than normal increase in value rent alternatives. Reason being that CPI can be increased or decreased in future and this will affect the builder's cashflow.

Likewise, operating expense is also an increase or decrease because the builder's cashflow can increase or decrease .

The risk level of all the four alternatives is shown below

Net lease with steps- Less risky

Net lease with CPI - Highly risky

Gross lease - Moderately risky

Gross lease with CPI - Highly risky

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Jim has an annual income of $180,000. Jim is looking to buy a house with monthly property taxes of $140 and monthly homeowners i

MariettaO [177]

Answer:

$787,471.02

Explanation:

Given:

Jim's annual income = $180,000

Monthly property taxes = $140

Monthly homeowners insurance = $70

Monthly student loan payments = $178

Maximum front end DTI limit = 28%

Maximum back end DTI limit = 36%

Amortizing period = 30 years = 360 months

annual rate = 4.5% compounded monthly

Now,

Monthly salary = $\frac{\textup{Annual income}}{\textup{12 months}}$

Monthly salary = $\frac{\textup{180,000}}{\textup{12 months}}$

Monthly salary = $15,000

Maximum front end DTI limit

= (Maximum Monthly loan payment + monthly property taxes + monthly homeowner's insurance) ÷ Monthly income

0.28 × $15,000 = Maximum Monthly loan payment + $140 + $70

Maximum Monthly loan payment = $4,200 - $140 - $70

= $3,990

and,

Maximum back end DTI limit =

0.36 × $15,000 = Maximum Monthly loan payment + $140 + $70 + $178

Maximum Monthly loan payment = $5,400 - $140 - $70 - $178

= $5,012

Now,

The monthly payment = minimum of [ $3990, $5012 ]

therefore,

The monthly payment = $3,990

Thus,

The maximum amount of loan = Monthly payment × $[\frac{(1-(1+\frac{r}{k})^{-kn})}{(\frac{r}{k})}]$

here,

k = 12 when compounded monthly

n = 30 years

r = 4.5% = 0.045

The maximum amount of loan = $3,990 × $[\frac{(1-(1+\frac{0.045}{12})^{-12\times30})}{(\frac{0.045}{12})}]$

The maximum amount of loan = $787,471.02

8 0

3 years ago

Matlock Company uses a perpetual inventory system. Its beginning inventory consists of 54 units that cost $37 each. During June,

Oxana [17]

Answer:

June 1

Debit inventory $5,994

Credit accounts payable $5,994

Being entries to record inventory purchased

June 2

Debit accounts payable $222

Credit purchases returns $222

Being entries to record inventory items returned

June 3

Debit Cost of sales $4,995

Credit Inventory $4,995

Being entries to record the cost of goods sold

For the sale,

Debit Cash account $7,290

Credit revenue account $7,290

Being entries to record sales

Explanation:

In the perpetual system of inventory management/valuation,purchases and sales are immediately recorded in the books. When inventory is purchased, debit inventory and credit cash or accounts payable.

Should there be a reason to return some or all of the items purchased, the entries required are debit cash/accounts payable and credit purchases returns.

When inventory is sold, two sets of entries are required. Based on the the inventory side,

Debit Cost of sales and Credit Inventory.

For the sale, Debit cash account and credit revenue account.

June 1 amount

= 162 * $37

= $5,994

June 2 amount returned

= 6 * $37

= $222

June 3

revenue amount = 135 * $54

= $7,290

Cost of sales amount

= 135 * $37

= $4,995

6 0

3 years ago

Stephen plans to purchase a car 5 years from now. The car will cost $43,011 at that time. Assume that Stephen can earn 7.11 perc

olga nikolaevna [1]

Answer:

$30,174.74

Explanation:

The computation of present value is shown below:-

Future value = Present value × (1 + Rate of interest ÷ 1200)^12 × time period

$43,011 = Present value × (1 + 7.11 ÷ (12 × 100)^(12 × 5)

$43,011 = Present value × (1 + 7.11 ÷ 1,200)^60

$43,011 = Present value × (1 + 0.005925 )^60

Present value = $43,011 ÷ (1 + 0.005925 )^60

= $43,011 ÷ (1.005925 )^60

= $43,011 ÷ 1.425397857

= $30,174.73317

= $30,174.74

Therefore for computing the present value we simply applied the above formula.

We also attached the spreadsheet for better understanding

In compounded monthly, the interest rate is divided by 12 months and the time period is multiplied by 12 months and the same is to be considered

8 0

3 years ago

Schuepfer Inc. bases its selling and administrative expense budget on budgeted unit sales. The sales budget shows 3,600 units ar

CaHeK987 [17]

Answer:

$45,520

Explanation:

Given that

Sales budget = 3,600 units

Variable selling and administrative expense = $4.10

Fixed selling and administrative expenses = $35,860

Depreciation expenses = $5,100

The computation of selling and administrative expenses is shown below:-

= Variable selling and administrative expenses + (Fixed selling and administrative expenses - Depreciation expenses)

= (3,600 unit × $4.10) + ($35,860 - $5,100)

= $14,760 + $30,760

= $45,520

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3 years ago

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Timberlake

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3 years ago