A commercial building is proposed to be built in a subdivision. The initial cost is estimated to be P20,500,000.00 with annual maintenance and operational cost of P480,000.00. For austhetic view, it is necessary to be painted every five years at a cost of P500,000.00. Annual income from tenants is expected to be P3,200,000.00. Assuming an annual interest rate of

A commercial building is proposed to be built in a subdivision. The initial cost is estimated to be P20,500,000.00 with annual maintenance and operational cost of P480,000.00. For austhetic view, it is necessary to be painted every five years at a cost of P500,000.00. Annual income from tenants is expected to be P3,200,000.00. Assuming an annual interest rate of

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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The UniMAP Holdings Group is considering investing RM10.0 million in a new shopping complex in Kangar, Perlis. The group has estimated that the shopping complex once built, will contribute RM1,250,000 per year for 10 years. The board of trustees of the group require that any new investment to be undertaken by the group should generate a required rate of return (MARR) of at least 12% per year of its investment. Assuming that at the end of 10 years period the shopping complex will retain about 60% of its initial investment as a salvage value. What should be the decision of the group on this proposed asset investment?
An investment proposal calls for $282,061 payment now and a second $140,722 6 years from now. The investment is for a project with a perpetual life. The annual interest rate is 6%. What is the approximate capitalized cost?
A project is offered which requires an outlay of £10,000. Returns at the end of years 1, 2 and 3 are expected to be £4000, £4000 and £2000 respectively. Compute the net present value of the project if interest is estimated to be 10% per annum compounded annually.
A project will produce an operating cash flow of $14,600 a year for 7 years. The initial fixed asset investment in the project will be $48,900. The net aftertax salvage value is estimated at $12,000 and will be received during the last year of the project's life. What is the net present value of the project if the required rate of return is 12 percent? Group of answer choices $22,627.54 $23,159.04 $34,627.54 $39,070.26 $41,040.83 please please solve it with a finance calculator and show your work, I know the answer but looking for some easy way to slove it by a finance calculator
A developer plans to start construction of a building in one year if at that point rent levels make construction feasible. At that time the building will cost $1,340,000 to construct. During the first year after construction would take place, there is a 60 percent chance that NOI will be $175,500 and a 40 percent chance that the NOI will be $88,600. In either case, NOI would be expected to increase at 2 percent per year after the first year. Required: How much should the developer be willing to pay for the land if he wants a 12 percent rate of return? (Round your answer to the nearest whole dollar amount.) Amount payable by developer $ 1,334,444
Improvements will be made in an assembly line with an initial investment cost of 67 000 TL, annual maintenance costs 3500 TL in 3 years. Each major maintenance is worth 6000 TL each, and the useful life of these improvements is expected to be 12 years. Find the present value of costs when the interest rate is 8%.
An investment of $20,000 for a new condenser is being considered. Estimated salvage value of the condenser is $5,000 at the end of an estimated life of 6 years. Annual income each year for the 6 years is $8,500. Annual operating expenses are $2,300. Assume money is worth 15% compounded annually. Determine the external rate of return and whether or not the condenser should be purchased.
The first investment in a firm is $500,000. From the initial year to the indefinite future, materials, maintenance, electric power, and other operational expenditures are projected to reach $10,000 per year. Every five years, major repairs and rehabilitations will be carried out at a cost of $100,000. What is the project's equivalent capitalized cost if the interest rate is 10% per year?

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