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Dvinal [7]
2 years ago
9

A property is financed with an 85% LTV at 10% interest over 25 years. What would the estimated BTIRRE be on equity given that th

e BTIRRP is 10.75%?
a. ​10.1%
b. ​10.4%
c. ​15.0%
d. ​13.2%
Business
1 answer:
Fofino [41]2 years ago
7 0

Answer:

c. ​15.0%

Explanation:

First we need to calculate the Debt to equity ratio

Debt to equity ratio = Debt / Equity

Debt to equity ratio = 85% / 15% = 5.66667

Now calculate BTIRRE  using following formula

BTIRRE  = BTIRRP + ( BTIRRP - BTIRRD ) x Debt to equity ratio

Where

BTIRRP = 10.75%

BTIRRD = 10%

Placing values in the formula

BTIRRE  = 10.75% + ( 10.75% - 10.00% ) x 5.66667

BTIRRE  = 10.75% + 4.25%

BTIRRE  = 15.00%

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John's boss asks for a recommendation for connecting the company network to a small satellite building about 1 km from the main
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3 years ago
Your friend, Alicia, is a graduating senior about to head to college in the fall. Alicia has a single checking account and is ea
kvv77 [185]

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3 years ago
Lisa has $1,000 in cash today. Which one of the following investment options is most apt to double her money? A. 6 percent inter
Zepler [3.9K]

Answer:

D. 8 percent interest for 9 years

Explanation:

We would use the formula future value formula below to determine which of the investment options would double her money:

FV=PV*(1+r)^n

PV is the amount invested which is $1000

r is the interest rate expected to be earned while n is the number of years First option:

FV=$1000*(1+6%)^3

FV=$1,191.02  

Second option:

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Third option:

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Fourth option:

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3 years ago
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Gre4nikov [31]

Answer:

Correct answer is TRUE

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Non-cash assets are expected to produce cash over time but the amount of cash they eventually produce could be higher or lower than the values at which the assets are carried on the books. Some factors that affects the value of non-cash assets are the general economic forces such as inflation or deflation, amortization or impairement itself of the assets. It maybe realized at favorable side (gain) or unfavorable (loss) side.

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