Divisibility" refers to the fact that money is divided into denominations for ease in completing transactions

Zenith Investment Company is considering the purchase of an office property. It has done an extensive market analysis and has es

ValentinkaMS [17]

Based on the NOIs from Year 1 to 8, the value of the property today to Zenith Investment Company will be $13,221,383.94.

<h3>What is the value of the investment today?</h3>

Because the investment will be sold in 7 years, we need to find the terminal value from year 8 and above considering the indefinite growth rate of 3%.

Terminal value:

= Year 8 cashflow / (Return rate - Growth rate)

= 1,459,170 / (12% - 3%)

= $16,213,000

This amount should be added to the Year 7 cashflow to get:

= 16,213,000 + 1,419,000

= $17,632,000

The value today can be found by taking all the cashflows to their present value and summing them:

= 1,240,000/ 1.12 + 1,240,000 / 1.12² + 1,240,000 / 1.12³ + 1,280,000 / 1.12⁴ + 1,330,000 / 1.12⁵ + 1,380,000/ 1.12⁶ + 17,632,000⁷

= $13,221,383.94

Find out more on present value at brainly.com/question/17199492.

7 0

2 years ago

Neil and Zack are working on a project that requires both research and presentation. Neil is better at research, so he gives the

natima [27]

The question provides us with the following scenario: "Neil and Zack are working on a project that requires both research and presentation. Neil is better at research, so he gives the presentation to Zack. " A comparative advantage is when an agent is better at something or can produce something at a lower cost. Here, Neil can do research better, so the answer is: A.) Neil doing the research

3 0

3 years ago

Read 2 more answers

You've collected the following information about a company: Assets Liabilities and Equity Cash 13,000 Accounts payable 16,000 Ma

professor190 [17]

Answer:

The answer is "$228,000"

Explanation:

Formula:

$\text{Total Assets = Current Assets + Fixed Assets}$

$= [\$ 13,000 + \$ 2,000 + \$ 4,000 + \$ 95,000] + [\$ 34,000 + \$ 80,000]\\\\= [\$ 114,000] + [\$ 114,000]\\\\= \$ 228,000$

8 0

3 years ago

Question 17

katovenus [111]

Answer:

B. List Operational Costs

Explanation:

3 0

3 years ago

Petras Company engaged in the following transactions during 2012, its first year in operations: (Assume all transactions are cas

Oksana_A [137]

Answer:

The net cash inflow from financing activities on Petras's 2013 statement of cash flows is $5. So, the correct option is A.

Explanation:

Petras Company

Statement of cash flows (extract)

Proceed from the issue of common stock $325

Repayment of outstanding debt ($220)

Dividends paid ($100)

Net cash inflow from financing activities $5

Note that earned revenues and incurred expenses would form the net income used under operating activities section of the cash flows.

The prior year values for there for comparative purpose only.

5 0

3 years ago