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
Lubov Fominskaja [6]
3 years ago
14

Suppose that we observe two comparable properties that have each sold twice within the past four years. Property A sold 24 month

s ago for $500,000 and Property B sold 48 months ago for $575,000. If the two properties were sold today at $425,000 and $465,000, respectively, estimate the change in market conditions (percentage change in price) per month, assuming we equally weight the two properties in our analysis.
Business
1 answer:
Elina [12.6K]3 years ago
4 0

Answer:

0.475% per month

Explanation:

value of property A 24 months ago = $500,000

current value of property A = $425,000

total decrease in value = $500,000 - $425,000 = $75,000 or 15%

monthly % decrease:

1.15 = (1 + r)²⁴

²⁴√1.15 = (1 + r)

1.0058 = 1 + r

r = 0.00584 = 0.58% decrease per month

value of property B 48 months ago = $575,000

current value of property A = $465,000

total decrease in value = $575,000 - $465,000 = $110,000 or 19.13%

monthly % decrease:

1.1913= (1 + r)⁴⁸

⁴⁸√1.1913 = (1 + r)

1.0037 = 1 + r

r = 0.0037 = 0.37% decrease per month

if both properties are weighted equally, then the market decrease per month = (0.58% x 1/2) + (0.37% x 1/2) = 0.475% per month

You might be interested in
An electronic card that is directly connected to a checking account is known as a ____.
dalvyx [7]
C) Credit card is an electronic card directly connected to a checking account
8 0
3 years ago
Read 2 more answers
Three-year Treasury securities currently yield 6%, while 4-year Treasury securities currently yield 6.5%. Assume that the expect
Reptile [31]

Answer:

The correct answer is 8%.

Explanation:

According to the scenario, the computation of the given data are as follows:

Let 1 year Treasury securities = t

So, Four year Treasury = [(Yield of 3 years Treasury × No. of year) + ( t × No. of  year)] ÷ Number of year

So, by putting the value, we get

6.5% = [(6% × 3) + ( t × 1)] ÷ 4

[(6% × 3) + t] = 6.5% ×4

t = 8%

So, the rate on 1-year Treasury securities three years from now is 8%.

4 0
3 years ago
Ralph gives his daughter, angela, stock (basis of $8,000; fair market value of $6,000). no gift tax results. if angela subsequen
Andreas93 [3]

Answer:

D) $2,000

Explanation:

Angela's basis on the stocks will be the same as her father's. Since she sold the stocks, her basis will be $8,000, so her recognized gains will = selling price - basis = $10,000 - $8,000 = $2,000

The IRS allows the donee (Angela) to use the doners (Ralph) basis when selling an asset received as a gift in order to determine the realized gain/loss.

6 0
3 years ago
Read 2 more answers
What elements must be present for fire to exist?
liraira [26]

Answer:

Matches, and log wood I'm guessing

7 0
3 years ago
Read 2 more answers
What is a trade off?
gizmo_the_mogwai [7]

a balance achieved between two desirable but incompatible features; a compromise.

4 0
3 years ago
Other questions:
  • Dominic is the founder of an innovative "impromptu catering" business that provides elegant, healthy party food and decorations
    11·1 answer
  • Barton Industries expects that its target capital structure for raising funds in the future for its capital budget will consist
    12·1 answer
  • The ________ holds that an individual should never do anything that is not honest, open, and truthful and that he or she would n
    8·1 answer
  • 3. This year, Paula and Simon (married filing jointly) estimate that their tax liability will be $200,000. Last year, their tota
    11·2 answers
  • Customers are usually more willing to pay more for the first unit of a good they purchase than for the​ second, third, or subseq
    13·1 answer
  • Thermopolis, Inc. reported retained earnings of $490,953 on December 31, 2017. During the year, Thermopolis recorded net income
    12·1 answer
  • The following information relates to Franklin Freightways for its first year of operations (data in millions of dollars): Pretax
    11·1 answer
  • Lara Technologies is considering a cash outlay of $227,000 for the purchase of land, which it could lease out for $36,150 per ye
    5·1 answer
  • Trevor Ang holds a $400,000 portfolio consisting of the following stocks:
    5·1 answer
  • Olivia is a partner in Pacific Trade. In the majority of states, with respect to any partnership obligations that Olivia does no
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!