A 1500 square foot office building will be leased at $12.00 per square foot and about 97.5% of the building is expected to be occupied. There is a lobby at the entrance of the building which contains vending machines that will earn $900 over the entire year. Operating expenses are projected at $6.25 per square foot and an expense stop will be set at $5.75 per square foot. Some credit losses are anticipated to be about 1.5% of potential rent. In addition, some tenants will be granted one month of free rent and the total cost will be equal to about 5.0% of potential rent. Finally, the landlord plans to set aside $0.75 per square foot in a CAPEX fund. What will be net operating income (NOI)? Round your answer to the nearest dollar. Your Answer: Answer

A 1500 square foot office building will be leased at $12.00 per square foot and about 97.5% of the building is expected to be occupied. There is a lobby at the entrance of the building which contains vending machines that will earn $900 over the entire year. Operating expenses are projected at $6.25 per square foot and an expense stop will be set at $5.75 per square foot. Some credit losses are anticipated to be about 1.5% of potential rent. In addition, some tenants will be granted one month of free rent and the total cost will be equal to about 5.0% of potential rent. Finally, the landlord plans to set aside $0.75 per square foot in a CAPEX fund. What will be net operating income (NOI)? Round your answer to the nearest dollar. Your Answer: Answer

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Accusoft Systems is offering small business owners a software package that keeps track of many accounting functions from bank transactions to sales invoices. The site license will cost $47,000 to install and will require a fee of $3500 every 3 months. If your company can save $13,500 every quarter and have the security of managing its books in-house, how long will it take for you to recover the investment at an interest rate of 9% per quarter? The time taken to recover the investment is determined to be.......quarters
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