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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)

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The issues of training, absenteeism , productivity and morale should be agreed upon at the first level of supervisors.

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2 years ago
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shtirl [24]

Answer:

<em>(D) among them the threat of a rival’s multibillion-dollar patent-infringement suit and the decline in sales of</em>

Explanation:

Simplified Meaning is: Several issues were heard by investors at the annual SHM.

Two problems were among those: a threat from the MDPI of a competitor and a decline in the sales of the strong microprocessor chip of the company.

Verbing modifier should amend the preceding clause and make much sense in relation to the preceding clause.

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8 0
3 years ago
Toby, owner of a cupcake shop in New York, is considering opening a similar business (i.e., a cupcake shop) in Phoenix. After sp
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Answer:

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6 0
3 years ago
The U.S. work week has declined from 60 hours in 1890 to 40 hours today. The impact of the decline in working hours:________
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Answer:

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4 0
3 years ago
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Answer:

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6 0
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