Question: A community wants to create a park on some vacant property on the outskirts of the town (zoned commercial). They estimate the benefit to the community to be worth $1,500,000. Contractors have estimated a net cost to build the park and to rezone the property to be $2,300,00. Should they build the park? A. 0.65 and Yes B. 0.65 and No C. 1.53 and Yes D. 1.53 and No
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- Project A and Project B are independent projects. Investment life of Project A is 4 years and investment life of Project B is 17 years. Project A's NPV is $375 and Project B's NPV is $1,743. EANPV of project A is $102 and EANPV of project B is $96. Which of the following decision is correct? O a. Select both projects because both have positive NPVs. O b. Select Project A because it has a shorter investment life O c. Select Project B because it has a longer investment life Od. Select Project A because it has a higher EANPV O e. Select Project B because it has a higher NPVYou’re called out of an investment committee meeting at your real estate company for an important phone call. Stepping back into the meeting you find you’ve missed the initial description of the Subject Property, but a heated debate on which Comparable Properties should be used to evaluate the property is underway. Glancing at a handout your analysts have prepared, you see observe the following table: Comp A Comp B Comp C Comp D Comp E Distance from Subject 0.50 Miles 0.75 miles 1 mile 0.25 miles 0.90 miles Year of Construction 1990 2005 1985 2015 2006 Sq. Ft. 14,000 SF 24,000 SF 10,000 SF 25,000 SF 37,000 SF Months Since Sale 3 months 9 months 12 months 4 months 2 monthsNone
- NPV unequal lives. Grady Enterprises is looking at two project opportunities for a parcel of land the company cumenty owns. The first project is a restaurant, and the second project is a sports facility. The projected cash flow of the restaurant is an initial cost of $1,430,000 with cash flows over the next six years of $170,000 (year one), $200,000 (year two), $330,000 (years three through five), and $1,720,000 (year six), at which point Grady plans to sell the restaurant. The sports facility has the following cash flows: an initial cost of $2.330,000 with cash flows over the next four years of $420,000 years one through three) and $3,480,000 (year four), at which point Grady plans to sell the facility. If the appropriate discount rate for the restaurant is 10.0% and the appropriate discount rate for the sports facility is 11.5%, use the NPV to determine which project Grady should choose for the parcel of land. Adjust the NPV for unequal lives with the equivalent annual annuity. Does…If the flood damage estimates for both alternatives were reduced to zero and replaced with benefits of $310,000 per year and $470,000 per year for thetwo alternatives, respectively, the B/C ratio for the Valley alternative is closest to:a. 0.93b. 1.02c. 1.23d. 1.56The product costing method that includes fixed manufacturing cost in inventories costs is called Select one: Variable costing. O a. Ob. Direct costing. O c. Absorption costing. Od. Contribution margin. The strategy MOST likely to reduce the breakeven point would be to: Select one: Oa. Decrease the fixed costs and increase the contribution margin. Ob. Increase both the fixed costs and the contribution margin. on Increase the fixed costs and decrease the contribution margin. d. Decrease both the fixed costs and the contribution margin.
- V3. A school district considers two alternative plans for an athletic stadium. An engineer makes the following cost estimates for each: Concrete Bleachers. First cost, $350,000. Life is 90 years. Annual maintenance cost $2,500. Wooden Bleachers on Earth Fill. First cost, $200,000. Life is 90 years. Painting cost $12,000 every 10 years. New seats costs $40,000 every 15 years and new bleachers cost $100,000 every 30 years (don’t include replacing the bleachers in year 90). Compare equivalent uniform annual costs for a 90-year period using i = 7% compounded annually. (Which one would you choose?)3you are considering bidding of a piece of land. According to zoning, the land could be used for construction of office, retail or mixed use. The annual rental income from the Office building, Retail building and Mixed use building are 3, 2.7 and 2.8 million respectively. Expenses to operate the office building, retail building and mixed use building are 1.08, 1.2 and 1.1 million respectively. Capitalization rates for the office building, retail building and mixed use building 10%, 11% and 10.5% respectively. Construction costs for the office building, retail building and mixed use building are 10, 8, 9 million respectively. What is the highest bidding price you are willing to tender for this piece of land?
- J: A county is considering three locations for a new dam. The three alternatives for the dams for the three locațions cost $25.000.000, $30,000,000, and $32,000,000. Currently flood damage amounts to $20,000,000 per year, If the new dams are built, the flood damage will be reduced to $17,000,000; $16,000,000; and $15,500,000 per year, respectively. Determine which dam should be built based on the incremental benefit/cost ratios using an interest rate of 5% per year and a life of 10 years. (Hint: the benefits are the reduced damage of new dams comparing with the old ones)NPV unequal lives. Grady Enterprises is looking at two project opportunities for a parcel of land the company currently owns. The first project is a restaurant, and the second project is a sports facility. The projected cash flow of the restaurant is an initial cost of $1,470,000 with cash flows over the next six years of $170,000 (year one), $200,000 (year two), $350,000 (years three through five), and $1,760,000 (year six), at which point Grady plans to sell the restaurant. The sports facility has the following cash flows: an initial cost of $2,410,000 with cash flows over the next four years of $380,000 (years one through three) and $3,240,000 (year four), at which point Grady plans to sell the facility. If the appropriate discount rate for the restaurant is 9.5% and the appropriate discount rate for the sports facility is 13.0%, If the appropriate discount rate for the sports facility is 13.0%, what is the NPV of the sports facility?A developer plans to purchase a vacant lot and build apartment units for which represent the highest and best use of the land. Assuming the anticipated NOI for the projected units for $850,000, the market-derived cap rates for the building and land are 11% and 9% respectively, and the projected value of the proposed building is 5,900,000. Based on the land residual technique, the land value would be. a. $2,166,667 b. $2,233,333 c. $2,600,000 d. $2,900,000 The answer falls outside of the range provided. not satisfied from previous answer need well explained , computated and formulated answer