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
Ludmilka [50]
3 years ago
13

A property is leased for $24,000 per year although market rents are currently $27,500 per year and are expected to increase by 2

% per year. The property is expected to be sold at the end of year 10 based on a 10% terminal cap rate applied to the eleventh year NOI. The current lease on the property will expire at the end of year 10 so the property can be leased in the eleventh year at market rates. What is the value of the leased fee estate based on an 11.5% discount rate
Business
1 answer:
zhannawk [14.2K]3 years ago
6 0

Answer:

the present vlaue of the ledased property = $251,298

Explanation:

the free market value in 10 years = ($27,500 x (1 + 2%)¹⁰) / 10% = $335,223

free cash flows year 1 - 9 = $24,000

free cash flow year 10 = $359,223

discoutn rate = 11.5%

using a financial calculator, the present value of the property = $251,298

You might be interested in
If a homeowner wants to sell his property to an adult child for $1, may a sales agent be involved in that transaction?
Umnica [9.8K]

Answer:

Of course a sales agent can be involved, although they will probably charge a fixed amount and not a sales percentage. Many people probably need the help of a sales agent to fill out legal forms, including contracts, etc. Not everyone has the knowledge to prepare them or simply fill them out, and a sales agent can be helpful.

7 0
3 years ago
On January 1, 2017, Smeder Company, an 80% owned subsidiary of Collins, Inc., transferred equipment with a 10-year life (six of
maks197457 [2]

Answer:

Credit accumulated depreciation for 2017 is $46,000

Explanation:

Accumulated depreciation increases as a result of increase in depreciation charged on fixed assets.

Given that:

Accumulated Depreciation = $48,000

Deferred Gain on Transfer = $12,000

Amortization of Gain = Deferred Gain on Transfer / 6 years remaining = $12000 / 6 = $2000

Credit to Accumulated Depreciation for 2017 = Accumulated Depreciation - Deferred gain on transfer = $48000 - $2000 = $46000

8 0
3 years ago
Explain the importance of profit to the economy.
Kay [80]

Answer:

Explanation:

Profit is the surplus revenue after a firm has paid all its costs. ... In a capitalist economy, profit plays an important role in creating incentives for business and entrepreneurs. For an incumbent firm, the reward of higher profit will encourage them to try and cut costs and develop new products

4 0
3 years ago
At high price levels, demand tends to be ________ and the price effect is ________, relative to the output effect.
rosijanka [135]
At high price levels, demand tends to be elastic and the price effect is small relative to the output effect.
3 0
2 years ago
Carly is watching television and notices that she has seen the same commercial four times during the same program. she wonders w
grigory [225]

Answer:

She is unfamiliar with the <u>"mere exposure effect."</u>

Explanation:

When an individual hear or see something many times, he/she develops a preference for that thing merely, the reason is that an individual is so much familiar with that, this phenomenon is known as mere-exposure effect. Sometimes we also develop that effect when we watch any tv program so many times that we develop much familiarity with that program.

8 0
3 years ago
Other questions:
  • Of 58 bank customers depositing a check, 15 received some cash back. (a) Construct a 90 percent confidence interval for the prop
    15·1 answer
  • What is budgeting time for a presentation?
    15·2 answers
  • Olive Inc., a chain of retail outlets, is converting its existing billing systems to a more robust online tool. In this process,
    9·1 answer
  • On January 1, 2021, a company purchased a machine that cost $500,000 and had a residual value of $50,000. The machine is expecte
    12·1 answer
  • Sebastian Motors is a family-owned car dealership with two locations in central France. The car dealership markets BMWs and Mini
    11·1 answer
  • A company's Inventory balance at 12/31/16 was $188,000 and $200,000 at 12/31/15. Its Accounts Payable balance at 12/31/16 was $8
    14·1 answer
  • Chen runs a consulting firm that provides strategies to companies that are into space exploration. What type of business does Ch
    10·1 answer
  • A buyer-supplier relationship is formed around leverage items in portfolio analysis to attain the desired levels of quality, qua
    9·1 answer
  • Mrs. Jones owns stock from which she received $3,000 in cash dividends. Mr. Jones owns stock from which he received $400 in cash
    7·1 answer
  • In your own words, what are the strengths and
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!