If I want to build to a 10, and my NOI will be $9 MM and my land costs are $20 MM, hard construction costs are $60 MM, what can my financing and interest costs not exceed? a. $20 b. $15 c. $10 d. Depends on the tax rate e. Cannot be solved with the information given f. Financing costs are not typically considered for build-to calculations g. None of the above

If I want to build to a 10, and my NOI will be $9 MM and my land costs are $20 MM, hard construction costs are $60 MM, what can my financing and interest costs not exceed? a. $20 b. $15 c. $10 d. Depends on the tax rate e. Cannot be solved with the information given f. Financing costs are not typically considered for build-to calculations g. None of the above

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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To calculate the initial project cash flow, this problem requires Using only the purchase price of the lot. Using today's market value for the land Using today's market value for the land plus the other costs O Using the purchase price of the lot plus the other costs
Compute the NPV for Project M if the appropriate cost of capital is 8 percent. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places.) Project M Time: 0 1 2 3 4 5 Cash flow: −$3,100 $710 $840 $880 $960 $460 Should the project be accepted or rejected?multiple choice rejected accepted
13.Concerning incremental project cash flow, this is a cost one would never count as a cash flow of the project. A. taxes paid B. financing costs C. initial investment D. operating expenses of the project
9
5.2 REQUIRED Study the information provided below and answer the following questions. Ignore taxes. 5.2.1 Compute the Net Present Value. Your answer must include the calculations of the present values as well as the net present values. 5.2.2 Should the new machine be considered for acceptance? Why? 5.2.3 Calculate the Internal Rate of Return (expressed to two decimal places) if the machines have no scrap/resale value. Your answer must include two net present value calculations (using consecutive rates/percentages) and interpolation. INFORMATION Vendit Limited is looking at the possibility of investing in fifty vending machines. The machines would cost R800 000, and its cash operating expenses would total R510 000 per year. The machines are expected to have a useful life of five years. At the end of five years, the machines would be sold for R160 000. On the benefit side, it is estimated that the machines would generate cash revenues of R760 000 per year. The cost…
The Klingon Sausage Corporation is trying to choose between the following two projects: Year Cash Flow (Project I) Cash Flow (Project II) 0 -$363,000 -$165,000 1 184,800 99,600 2 184,800 99,600 3 184,800 99,600 The discount rate of both projects is 8%. Klingon’s manager believes the company has sufficient resources so that the two projects should not be treated as mutually exclusive. Which project should be taken based on the profitability index? A. Project I should be accepted and project II should be rejected. B. None of the projects should be accepted. C. Project I should be rejected and project II should be accepted. D. Both projects should be accepted.
1. What are three significant differences between income property finance and owner occupied single family residential finance 2. You are considering a loan or investment in an income property. The projected DSCR is too low relative to like properties. What does that potentially tell you? 3. You are considering a loan or investment in an income property. The market Cap Rate is significantly higher than suggested by current NOI on the subject property relative to the asking price. Discuss the implications and potential causes,
M1

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