1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
lakkis [162]
3 years ago
7

A property is being appraised using the income capitalization approach. Annually, it has potential gross income of $40,000, vaca

ncy and credit losses of $3,500, and operating expenses of $16,000. Using a capitalization rate of 8%, what is the indicated value (to the nearest $1,000)?
Business
2 answers:
luda_lava [24]3 years ago
6 0

Answer:

<em>Value $  256,250</em>

<em>rounding against nearest 1,000 dollar: 256,000</em>

<em />

Explanation:

From the gross income we subtract the expenses and vanacy losses.

40,000 gross income - 3,500 vacancy - 16,000 operating expense

20,500 net

<em />

Now, we solve for the present value of a perpetuity given the capitalziation rate of 8%

$ 20,500 /  0.08  =  <em>$  256,250</em>

Anton [14]3 years ago
5 0

Answer: $256,000

Explanation:

Given the following ;

Gross income = $40,000

Vacancy and credit losses = $3,500

Operating expenses = &$16,000

Capitalization rate = 8%

Using the income capitalization approach, property is valued based based on the revenue which it could potentially generate. These includes property which could be leased, whereby money is generated from lease amount.

Cost incurred is deducted from revenue to get the net income

Net income = Gross income - cost incurred

Gross income - (Vacancy or credit losses + operating expense)

$40,000 -($3,500+$16,000)

$40,000 - $19,500 = $20,500

Net income = $20,500

Net income ÷ capitalization rate

$20,500 ÷ (8÷100)

$20,500 ÷ 0.08 = $256,250

Indicated value = $256,000 (to the nearest 1000 dollar)

You might be interested in
The _____, which can hold a wide variety of merchandise by means of hardware hung from the vertical spine, is the workhorse fixt
ohaa [14]

Answer and Explanation:

gondola.

7 0
3 years ago
Craigmont Company's direct materials costs are $4,200,000, its direct labor costs total $8,080,000, and its factory overhead cos
USPshnik [31]

Answer:

$12,280,000.

Explanation:

All the direct costs involved in the manufacturing of a product except fixed cost is called prime cost e.g direct material, direct labor etc.

Direct Material = $4,200,000

Direct labor = $8,080,000

Total Prime cost = Direct material + Direct labor = $4,200,000 + $8,080,000 = $12,280,000

Overhead costs are not classified as the prime cost because these are indirect costs.

4 0
3 years ago
In contrasting equity and efficiency, why do high-tech firms seem to treat their employees better (better wages, benefits, worki
shusha [124]

Answer:

High-tech firms are hiring expensive, sophisticated people who are in high demand compared to fast food franchises and treat them better to avoid losing them to other companies

Explanation:

High-tech firms are hiring expensive, sophisticated people who are in high demand. This brings about a better treatment of their employees because if they do not offer these amenities to employees, they would become employees of other high-tech companies. Individuals with low skill levels do not get high salaries or benefits. They are not in as high demand as highly skilled workers. It is efficient, but many would argue that it is not fair.

3 0
2 years ago
A stock just paid a dividend of $4.97 and is expected to maintain a constant dividend growth rate of 4.3 percent indefinitely. I
pshichka [43]

Answer:

68

Explanation:

5 0
2 years ago
In March​ 1963, Ironman was first introduced in issue number 39 of Tales of Suspense. The original price for that issue was 12 c
lidiya [134]

Answer:

24.73%

Explanation:

(1 + i)ⁿ = future value / present value

annual interest rate = i

n = 52 years

future value = $11,750

present value = $0.12

(1 + i)⁵² = $11,750 / $0.12 = 97,917

1 + i = ⁵²√97,917

1 + i = 1.2473

i = 1.2473 - 1 = 0.2473 = 24.73%

4 0
3 years ago
Other questions:
  • The City of Fairfield issued $100 million of 20-year, 6 percent coupon bonds (3 percent per semiannual period) for $89.32 millio
    9·1 answer
  • Manuel sued Patricia on a promissory note. Patricia admitted signing the note, but raised the defense that Manuel was not a hold
    13·1 answer
  • The type of decision making a consumer uses for a product does not necessarily remain constant.why?​
    7·1 answer
  • Isaac benefited from his experience working for an established private company that provided state-of-the-art lighting for music
    14·1 answer
  • Exercise 14-04 a-c Bonita Company reports the following costs and expenses in May. Factory utilities $16,000 Direct labor $72,70
    15·1 answer
  • On January 1, 2021, Tru Fashions Corporation awarded restricted stock units (RSUs) representing 5 million of its $1 par common s
    6·1 answer
  • A ____ consist of the actions a person is expected to perform in a group.
    9·1 answer
  • Listening involves understanding what is heard true false ?
    9·1 answer
  • Customer groups represent different segments if: ___________.a. Their needs require different products/services or different pri
    9·1 answer
  • Administrative:
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!