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Ksju [112]
2 years ago
11

The first-year NOI for an office building is $150,000. A lender is willing to provide financing up to a 1.5 debt-coverage ratio.

If the mortgage has a 5-year maturity, 25-year amortization period, and 6% rate of interest, what is the maximum loan size that you can obtain assuming that payments are made on an annual basis?
Business
1 answer:
Hoochie [10]2 years ago
5 0

Answer:

the maximum loan size is $1,278,335.62

Explanation:

The computation of the maximum loan size is as follows:

= (NOI first year ÷ debt coverage rate) × 1 ÷ (rate of interest) × (1 - 1 ÷ (1 + rate of interest)^number of years)

= ($150,000 ÷ 1.5) × 1 ÷ (6%) × (1 - 1 ÷ (1 + 6%)^(25))

= $1,278,335.62

hence, the maximum loan size is $1,278,335.62

We simply applied the above formula

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Because Country A has no domestic sources of wood, it imports all its wood from wood-producing countries. If the price of wood i
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C Housing prices in Country A will increase as wood imports become more expensive.

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3 years ago
A stock currently sells for $25 per share and pays $0.24 per year in dividends. What is an investor's valuation of this stock if
asambeis [7]

Answer:

$26.30

Explanation:

Calculation to determine the investor's valuation of this stock

Using this formula

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Investor's valuation of the stock = [$0.24 / (1 + 0.15)] + [$30 / (1 + 0.15)]

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3 years ago
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