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
Alina [70]
3 years ago
9

A property that produces a first year NOI of $80,000 is purchased for $750,000. The NOI is expected stay constant through year 5

, and to increase by 15% in the sixth year when some of the leases turn over. The NOI would then stay constant in years 6-10. The resale price in year 10 is expected to be $830,000. What is the net present value of investing in this property based on the 10-year holding period and a required return of 9.5%
Business
1 answer:
PIT_PIT [208]3 years ago
4 0

Answer: $115998

Explanation:

Based on the information given, we can calculate the NOI from the 6th year which will be:

= $80,000 × (100% + 15%)

= $80,000 × 115%

= $80,000 × 1.15

= $92,000

Therefore, the net present value of the property based on the 10-year holding period and a discount rate of 9.5% will be:

= 80000(PVAF, 5 year) + 92000[PVAF,(10-5),9.5%] + 830000/(1.095)10-750000

= (80000 × 3.839) + (92000 × 2.439) + (830000 × 0.403) - 750000

= 307120 + 224388 + 334490 - 750000

= 865998 - 750000

= $115998

Therefore, the net present value is $115998

You might be interested in
A(n) ________ represents a condensed version of the registration statement that enables prospective investors to evaluate a stoc
stiks02 [169]

Answer:

D. prospectus

Explanation:

prospectus is a term used in company law, it can be regarded as a formal and legal document that are used for invitation of offers from the public, so that public can subscribe to or purchase any securities. prospectus is basically a formal and legal document issued by a body corporate which acts for inviting offers from the public for subscription or purchase of any securities.prospectus is usually issued by a body corporate. And in this case the entitlement on issueing of prospectus is open to the every public company so that they can issue prospectus for shares or debentures, however not required as far as private company is concerned. It should be noted that prospectus represents a condensed version of the registration statement that enables prospective investors to evaluate a stock for possible purchase.

3 0
3 years ago
9. Problems and Applications Q9 Suppose that a borrower and a lender agree on the nominal interest rate to be paid on a loan. Th
den301095 [7]

Answer: False

Explanation:

The real interest rate is the nominal interest rate adjusted for inflation.

If the nominal interest rate was made with inflation in mind and this inflation is less than anticipated, the real rate will be higher not lower than expected.

For instance: Assume the nominal rate is 8% and the two parties assumed inflation would be 4%. Real rate would be:

= 8 - 4 = 4%

If inflation is instead 2%, real rate would be:

= 8 - 2 = 6%

Real rate would be higher than anticipated.

8 0
3 years ago
A company's board of directors votes to declare a cash dividend of $1.10 per share of common stock. The company has 22,000 share
lutik1710 [3]

Answer:

$18,150

Explanation:

Calculation for the total amount of the cash dividend

Since A company's board of directors  has votes to declare the  cash dividend of $1.10 per share of common stock, this means we have to multiply the cash dividend per  share of common stock by the shares outstanding which is $16,500

Using this formula

Cash dividend per share of common stock * Shares outstanding

Let Plug in the formula

$1.10*16,500

=$18,150

Therefore the total amount of the cash dividend  will be $18,150

5 0
3 years ago
The chart describes four people’s credit histories. Creditworthy Criteria Name Description of Credit History Ellie Has more debt
GrogVix [38]
Eesha is the one who is creditworthy.
7 0
3 years ago
Read 2 more answers
Your phone service provider offers a plan that is classified as a mixed cost. The cost per month is $50 flat rate for the first
kondor19780726 [428]

Answer:

D

Explanation:

The first 1000 minutes cost per month $50 and if you use 1200, minimum you will be charged with $50. To find the cost of the 200 reamining minutes, you multiply 200 times $0,35, which is the cost of one minute when you exceed 1000 minutes. Then you have:

$50⇒ for 1000 minutes

$70⇒ for 200 minutes

Total

$120⇒ for 1200 minutes

5 0
3 years ago
Other questions:
  • The idea that the demand for autoworkers stems from the demand for automobiles is
    14·1 answer
  • When defining its market segments, the xyz company identifies groups based on characteristics such as age, gender, income, and e
    9·1 answer
  • What type of report must accompany claims when an unusual, new, seldom used, or category i unlisted code or category iii code is
    8·1 answer
  • Solid Appliances, Inc., is a private, for-profit corporation that (1) was formed for the purpose of manufacturing and distributi
    14·1 answer
  • Do It! Review 9-1 Pharoah Company purchased a delivery truck. The total cash payment was $43,222, including the following items.
    12·1 answer
  • If the length of the axle was cut 5mm shorter, the volume would be reduced to 280.7mm3. What would be the new mass of the axle?
    10·2 answers
  • Which statement best describes the laissez-faire economic policies of the 1920s? There should be extensive government control of
    10·2 answers
  • Roberta is taking the final course in the fourth semester of the Veterinary Technician program. When she reads the final project
    11·1 answer
  • In a(n) ________ strategy, managers try to gain a competitive advantage by focusing the energy of all the organization's departm
    8·1 answer
  • the program protection plan (PPP) is the milestone acquisition document that describes the plan, responsibilities, and decisions
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!