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Iteru [2.4K]
2 years ago
9

An investment property with 10 residential units rents for $2,000 per unit per month. The rate of vacancy and collection loss is

5%. Annual expenses are $10,200. Depreciation is 3%, and the interest paid on the trust deed is 12%. If the investor wants a 12% rate of return, what is the most she should pay?
Business
1 answer:
irinina [24]2 years ago
5 0

Answer:

$1,815,000

Explanation:

First we must determine the gross income = $2,000 x 10 units x 12 months = $240,000

minus the vacancy rate = $240,000 x 5% = $12,000

minus the annual expense = $10,200

net income = $240,000 - $12,000 - $10,200 = $217,800

to calculate the maximum amount that the investor should pay we must divide the net income by the expected rate of return = $217,800 / 12% = $1,815,000

When you are calculating a project's price (buying this asset is an investment project), depreciation and debt service are not included in the calculations.  

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It is an example of cyclical unemployment.

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​Jim's Handicrafts' main product sells for​ $100 and the cost of goods sold is​ $40. The​ $60 (the difference between the​ two)
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Answer:

Gross Profit

Explanation:

Gross Profit is defined as the amount earned by the company, after deducting the cost of producing and selling the products in case of a manufacturing business, or the cost of providing services to customers in case of service oriented business. Therefore, the difference between sales revenue and the cost of goods sold is called Gross Profit.

Sales Revenue - Cost of Goods Sold = Gross Profit

$100 - $ 40 = $60  

4 0
3 years ago
What are some of the ways in which the government is involved in the economy? what are the advantages and disadvantages of gover
ArbitrLikvidat [17]
The government can control tariffs and can limit how much can be imported into the usa.
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The government can own public works such as a water company if they feel they can provide the service for a lower cost than the local competitors.
The government can decide which companies are monopolies and which companies are violating federal policies regarding trade. The government has the power to break up monopolies.
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5 0
2 years ago
Advertisements that feature promotions such as buy-one-get-one-free offers essentially signal that customers will get value in s
asambeis [7]

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<em>a. discriminative stimuli. </em>

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6 0
2 years ago
Fixed Overhead Spending and Volume Variances, Columnar and Formula Approaches
shutvik [7]

Answer:

Fixed Overheads Spending Variance = $5,000 Unfavorable(U).

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Explanation:

Fixed Overheads Spending Variance = Actual Fixed Overheads  - Budgeted Fixed Overheads

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                                                              = $5,000 Unfavorable(U).

Fixed Overheads Spending Variance = Fixed Overheads at Actual Production  - Budgeted Fixed Overheads

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3 0
3 years ago
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