Assume an apartment has a floor area of 3,000 SF. The existing rent per month is $3,000. The market level rent is $15,000 per month. Assume that the tenant is willing to enter into a voluntary vacateagreement to be bought out of his lease and that you are now negotiating a buy out price. The apartment requires an additional $200,000 in renovation to get it up to market standards. If a prevailing caprate for this apartment is 4.0%, at what buy out price is the incremental value created by the landlord for this unit after renovations equal to zero?O $3,40,000O $2,350,000O $1,000,000O $3,100,000

To find the buyout price where the incremental value created by the landlord is equal to zero, we…

Answered: Assume an apartment has a floor area 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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You need a car and decide to lease for 36 months. The original price is $20,000 and the trade value in 36 months, assuming you don't exceed the mileage allowance, is $5,000 (treat this as a future value). No down payment is required. If the interest rate is 9% APR compounded monthly, what is the lease payment? I need it witha solutuion $503.38 $5066.37 $5100.15 $510.67
You went to the car dealer to lease a car. The car is valued at $30,000 and you can drive away without putting any money down. The dealer offers you a 5 year lease with a $5,000 residual payment at the end if you want to buy the car. Assuming monthly payments of $508.32, what is the implied APR? Your answer should be close to a round number. Use a % symbol and round to the nearest 1 decimal point.....3.0% would be the form of a correct answer.
You have been offered a contract from Comp Co. You will receive $120,000 up front from Comp Co. In exchange, you will provide $50,000 in services each year for 3 years. Your cost of capital is 10%. Find the NPV and IRR of the deal. Should you accept the contract? Explain.
Compare the cost of the following lesing agreement with the finance charge on a loan for the same time period. The price of the car is $14,000, and its projected residual value at the end of four years is $3,000. Monthly payment $250 Capital cost reduction $1,000 Disposition charge $200 Other things being equal, one would want to finance this car rather than take this lease if the finance cost were less than Select one: a. $2,200 b. $2,000 c. $1,550 d. $1,450
Calculate how much money a prospective homeowner would need for closing costs on a house that costs $190,000. Calculate based on a 15 percent down payment, 1.3 discount points on the loan, a 1.2 point origination fee, and $820 in other fees. The closing costs would be $. (Round to the nearest dollar.)
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely.
1. Your client has been offered the opportunity to invest in a project which will pay $1,000 per month at the end of months 1 to 10 and $2,000 per month at the end of months 21 to 30. The interest rate over the period of the investment is a nominal rate of 8% p.a. If your client can buy the investment today for $25,000 would you recommend that this is a good investment? Why or why not?
Compare the cost of the following leasing agreement with the finance charge on a loan for the same time period. The price of the car is $25,000, and its projected residual value at the end of five years is $10,000. Monthly payment $450 Capital cost reduction $1,700 Disposition charge $400 Other things being equal, one would want to finance this car rather than take this lease if the finance cost were less than Group of answer choices $14, 100. $15,500. $12,900. $400.
You are choosing between two mortgage options for a $1,000,000 property. The first option is a 60% LTV mortgage at an interest rate of 7%. The payment on this mortgage is calculated as if it were a 30 year mortgage, but the mortgage balance is due in 10 years. This loan also charges a 1% origination fee. The second option consists of two loans combined together. The primary loan (first mortgage) is a 50% LTV loan at an interest rate of 6.5%. This loan is an Interest Only loan due in 10 years and the loan charges a 1% origination fee. The secondary loan for this option is a 10% LTV loan at an interest rate of 9%. This loan is fully amortizing and is also due in 10 years and charges a 2% origination fee. What is the combined payment of the two loans that together form the 2nd loan option? Multiple Choice O $3,975.094 $3,248.4852 $2,783.4973 $1,846.7921
A family wishes to buy a $235,900 home. - If a conventional lender is willing to loan the family 87% of the price of the home, what will the loan amount be? What will be the down payment with the loan? - If the family decides to obtain an FHA loan instead, what will the minimum down payment be? (FHA loan down payments are 3.5% of the first $25,000 and 5.2% of the balance of the loan). What is the maximum FHA loan the family can obtain?

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