Assume that the average price for a 2,000-square-foot house in the city is $330,000 and the average rent for a 2,000-square-foot apartment in the cilty is $1,500 permonth. Also assume that the average price for a 2,000-square-foot house in the suburbs is $220,000, the average price for a 2,000-square-foot house in the countyis 5350,000, and the average price for a 3,000-square-foot house in the suburbs is $500,000Using comparative statics and the information above, what is the best estimate of the effect of living in the city (relative to living in the suburbs) on home prices?Living in the city changes home prices by s (Round your respanse to hwo decimal places) Suppose apartments are in four locations Location A Location B, Location C, and Location D. Location Ais in the city where your job is Location Bis 10 minutesfarther from your job than Location A Location Cis 10 minutes farther bom your job than Location B, and Location Dis 10 minuts farther than Location C in tumsimilar apartments in Location B rent for S125 less per month than apartments in Location A apartments in Location C rent for $125 less than in Location B. andapartments in Lecation Drent for $125 less than in Location C Suppose the value of your time is $18 per hour and you work 21 days per month with each dayrequiring a round rip commute from your apartment to workFor simplicity asume rent and the opportunity cost of your time commuing to work are the only lactors infuencing the focation in which to rent an apartmentYou should rent an apartment inSuppose you curently nt an apartment in Location CDy moving to optimize, you change your net beneft by Ener your respone at an nteger)

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Assume that the average price for a 2,000-square-foot house in the city is $330,000 and the average rent for a 2,000-square-foot apartment in the city is $1.500 per month. Also assume that the average price for a 2,000-square-foot house in the suburbs is $220,000, the average price for a 2.000-square-foot house in the county is $350,000, and the average price for a 3,000-square-foot house in the suburbs is $500,000 Using comparative statics and the information above, what is the best estimate of the effect of living in the city (relative to living in the suburbe) on home prices? Living in the city changes home prices by S (Round your reaponse to hwo decamal places)

Assume that the average price for a 2,000-square-foot house in the city is $330,000 and the average rent for a 2,000-square-foot apartment in the city is $1.500 per month. Also assume that the average price for a 2,000-square-foot house in the suburbs is $220,000, the average price for a 2.000-square-foot house in the county is $350,000, and the average price for a 3,000-square-foot house in the suburbs is $500,000 Using comparative statics and the information above, what is the best estimate of the effect of living in the city (relative to living in the suburbe) on home prices? Living in the city changes home prices by S (Round your reaponse to hwo decamal places)

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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Consider a simple, homogeneous monocentric city with a circular shape. If the location rent premium at the center is $6,000 per year per acre, the rent at the edge of the city is $10,000 per year per acre, and the density is 3 persons per acre. Supposing that the annual transportation cost per person per mile of distance from the CBD is $200 (round-trip), and if the population increases by 10% (density and transportation cost do not change), what will be the new rent at the center of the city per year per acre? $16,300 $15,250 $16,600 $15,000
A rental car agency rents cars for an average price of $45/day. The number of cars owned in 2020 totals 150. The number of days rented per car in 2020 equals 200. Hence, the rental revenue in 2020 totals $45(150) (200), or $1,350,000. If the agency increases the number of cars at an annual rate of 10%, the number of days rented per car each year remains constant, and the average rental rate increases 5%/year due to inflation, what is the present worth of rental income in 2025 if the agency’s real MARR is 10%? (Allow for a fractional valued number of cars.)
A businessman is considering building a 25 unit apartment. The occupancy rate is expected to be 90% at all time. He desires a ROR of 20% in his investment. Other data are: Land investment = P5,000,000 Building construction = P7,000,000 Life of investment = 20 years Cost of land after 20 years = P20,000,000 Cost of building after 20 years = P2,000,000 Rent per unit per month = P10,000 Maintenance per unit per year = P2500 Taxes per year = 1% Insurance per year = 0.50% Is this a good investment? Use ROR method. Answer: Investment is justified, but what is the value of ROR? (VALUE OF ROR IS MORE THAN 12.55%)
Assume you are looking to share an apartment with another person, Joe. The rent for a 2-bedroom/2 bath apartment is $1,000 per month. Joe wants to split the rent 50/50. Prior to agreeing to this, you find out the following information: Joe’s bedroom is 20’ x 24’ or 480 square feet with an on suite bath. Your bedroom is 12’ x 10’ or 120 square feet and the bath will be used by visitors too. You think that the rent should be allocated between you and Joe based upon the relative square feet of your rooms. Whose method (Joe’s or yours) represents activity-based costing?
I need the answer as soon as possible
A businessman is considering building a 25- unit apartment in a place near a progressive commercial center. He felt that because of the location of the apartment it will be occupied 90% at all times. He desires an MARR of 20%. Óther pertinent data are the following: Building investment $5,000,000 Rent per unit per month 6,000 Maintenance per unit per year 500 Property taxes 1% of investment Insurance 0.50% of investment Cost of building after 20 years 2,000,000 Study period 20 years a. What is the rate of return of the investment? Write the answer in percentage value, up to 2 decimal places. b. How much is the excess of the investment's cash flow? Roundoff answer to the whole number. c. The payback period is Write the answer in two decimal places. d. Should the businessman continue with the investment? Justify your answer.
A family spends $30,000 a year for living expenses. If prices increase by 5 percent a year for the next three years, what amount will the family need for their living expenses after three years?
The market value of a home in Boston, MA. is $330,000. The assessment rate is 30%. What is the assessed value?
You are an employee of University Consultants, Limited, and have been given the following assignment. You are to present an investment analysis of a small retail income-producing property for sale to a potential investor. The asking price for the property is $1,360,000; rents are estimated at $174,080 during the first year and are expected to grow at 2.5 percent per year thereafter. Vacancies and collection losses are expected to be 10 percent of rents. Operating expenses will be 35 percent of effective gross income. A fully amortizing 70 percent loan can be obtained at 6 percent interest for 30 years (total annual payments will be monthly payments × 12). The property is expected to appreciate in value at 3 percent per year and is expected to be owned for five years and then sold. Required: a. What is the first-year debt coverage ratio? b. What is the terminal capitalization rate? c. What is the investor’s expected before-tax internal rate of return on equity invested (BTIRR)? d.…
Assume you are looking to share an apartment with another person, Joe. The rent for a 2-bedroom/2 bath apartment is $1,000 per month. Joe wants to split the rent 50/50. Prior to agreeing to this, you find out the following information: Joe’s bedroom is 20’ x 24’ or 480 square feet with an on suite bath. Your bedroom is 12’ x 10’ or 120 square feet and the bath will be used by visitors too. You think that the rent should be allocated between you and Joe based upon the relative square feet of your rooms. Which method is most accurate? Why?
Read the article. The question is Remy is trying to decide if he should rent or buy. He is considering moving from his city in the next two years. Remy found a house he likes, but it would take 50% of his budget. Remy would like to start building equity. The apartments with amenities and features he likes are around 25%-35% of his budget. Given this information, do you think he should rent or buy? Why?
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