Using the information from the three office building land sales. Assume that you are valuing a similar building of 30,000 square feet. What is the appropriate land value? Sales Price Building Size Land Size Sale 1 $550,000 27,500 SF 2.50 acres Sale 2 $625,000 31,250 SF 2.50 acres Sale 3 $650,000 32,500 SF 3.25 acres
Q: Estimate the capital that will be required in establishing a one-hectare fruit farm based on the…
A: The capital required to begin a business shall be equal to at least the minimum expenses which will…
Q: Determine the expected average rate of return for each proposal. 3D Printer Truck % 0/0
A: Average rate of return:The average rate of return (ARR) determines the profitability of an…
Q: please solve and provide clear and correct answer thanks A developer plans to purchase a vacant…
A: To calculate, the land value using the land residual technique, we need to subtract the projected…
Q: Here is the ORIGINAL data of the Sporthotel problem: 1. Projected outflows First year (Purchase…
A: Formulas: Expected NPV= Present value of cash inflows - Initial investment
Q: A machine is purchased and depreciated over four years. The tax rate is 21% and the project's cost…
A: Working Note#1Computation of depreciation:Depreciation=Depreciation=Depreciation=$ 172,500Working…
Q: Your Team is evaluating whether to bid on an apartment complex. The complex is 180000 sq ft. The…
A: Net operating income (NOI) can be referred to as the amount of revenue which is left after allowing…
Q: A company owns a 6-year-old gear hobber that has a book value of $60,000. The present market value…
A: The net cost of an object is the gross cost less any advantages derived from having it. There are…
Q: You are trying to evaluate the feasibility of purchasing a quarter-acre plot (approximately 11,000…
A: Identification of Cash Flows:Monthly Rental Income: $2,500 (after taxes)After tax proceeds from…
Q: Your friend is ready to make an offer on a 2500 sq. ft. home that is priced at $485,000. She…
A: Prices of homes varry from area to area and also depends on the size and other related…
Q: Six sites have been identified for a parking lot in downtown Blacksbu should be chosen based on the…
A: Cost of capital or MARR is benchmark rate of return and any rate of return…
Q: Assignment Scenario: Jerry wants to buy an assisted Living Facility in his home town. Currently, the…
A: Current Profit = 10,000 Annual Profit in second scenario = 40,000 Value of facility = 650,000
Q: A company is thinking of investing in one of two potential new products for sale. The projections…
A: Internal rate of return refers to the method which is used for calculating the rate of return over…
Q: Return on Investment (ROI) Formula: ROI = [(Investment Gain – Cost of Investment) / Cost of…
A: We need to calculate return on investment (ROI). ROI is a percentage showing the gain made on an…
Q: Acme Investors is considering the purchase of the undeveloped Baker Tract of land. It is currently…
A: It is the value left after deducting the cost of construction from the value of property. The value…
Q: You are given the following data for a project that is to be evaluated using the APV method. Year 3…
A:
Q: onsidering the below information, what would be the potential developer profit: Building Size…
A: We need to calculate the potential developer profit, based on the below informationBuilding size…
Q: Average Rate of Return The following data are accumulated by GreenApple Motors Inc. evaluating two…
A: SOLUTION- AVERAGE ANNUAL INCOME = TOTAL INCOME /TOTAL LIFE .…
Q: 1. Calculate the expected IRR based on the following operating and resale cash flows: IRR PV Total…
A: 1. Expected IRR = 9.85% based on the cash flows. 2. PV of Operating cash flows =13,118,065 PV of…
Q: please solve with formulas like (F/P, 5% , n) no with the excell. D.1. Your client asks you to check…
A: The present value of all benefits will give the cost that can
Q: Please answer correct with good presentation using commas and dollar sign in each figure…
A: The relevant cost includes all those cost which would affect the decision making process and it also…
Q: A project engineer is assigned to provide computer networking and internet access to an office…
A: Least Common Multiple method uses the LCM of the estimated life's of the alternatives available and…
Q: Sky High Partners is evaluating a high-rise office building to add to its investment portfolio. To…
A: Gross Rental Income =$894000 Estimated Vacancy Rate = 3.5% Therefore occupancy rate = 100% -3.5% =…
Q: Consider the following information about apartment complex: Gross rental receipts $970,000 Other…
A: Under net operating income approach, the value of a property is equal to the capitalized value of…
Q: Your friend would like to add an addition to the home. The home was originally purchased for…
A: The return on investment (ROI) is a financial metric that helps to measure the efficiency of an…
Q: If corporate headquarters for UPS in Atlanta is considering adding to its 96,000 + fleet of delivery…
A: Depreciation expense: Depreciation expense is a non-cash expense, which is recorded on the income…
Q: You are trying to evaluate the feasibility of purchasing a quarter-acre plot (approximately 11,000…
A: Here,After-Tax Receipts of Rent is US$2,500After Tax Proceeds of Sale of land after 10 years is…
Q: calculate the removable cost of a building under IFRS
A: Given in the question:Discount rate = 7%Removable cost after 20 Years = $100,000Building Cost =…
Q: Sammie's Club wants to buy a 320,000-square-feet distribution facility on the northern edge of a…
A: Going-in capitalization rate/Direct Capitalization Method Projected first-year NOI divided by the…
Q: Please calculate the NOI
A: NOI is the Net Operating Income is used to analyse the profitability of real estate investments. It…
Q: which is the most profitable
A: The investment cash inflow is more than cash outflow, it will be more profitable. Calculation of…
Q: (b) In order to choose between Project A and Project B, the project planner must make a decision.…
A: The objective of the question is to determine which project, A or B, is more preferred using the…
Q: Consider a plot of land. You can construct an office building at a cost of $5m or a hotel at a cost…
A: Construction of office building:Initial investment = $5 millionNOIYear 1 = $240,000Year 2 =…
Q: If we assume that all approaches were equally reliable, the range of value for this appraisal is O…
A: If all the approaches are equally reliable, then range of value will be lower value to upper value.
Q: What is the indicated value of the subject property using direct capitalization, rounded to the…
A: Direct Capitalization Method: This method computes the value by dividing the net operating income…
Q: cial terms and performance ratios (see graphic). You want to buy it at an 8.5 cap. What is your , at…
A: Net operating income is the necessary factor to be considered in purchase of property and using cap…
Q: determine and discuss the profitability of the proposed scheme.
A: COST OF BUILDING TO BE CAPITALISED: A Gross Internal Floor Area (GIFA)…
Q: The following information related to a real estate asset investment that is fully financed using…
A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: B- An investor bought the land with price 4000000 $ and sell it after 6 years with price 6500000…
A: Capital budgeting is the process that is used by individuals and companies for the purpose of…
Q: Assume a broker has listed a grocery-anchored shopping center with 100,000 sf of total retail space…
A: Financial terms used in real estate investment research include exit cap rate, often referred to as…
Q: you are pricing a property and found four suitable comparables (I,II,III and IV) with the following…
A: Comparable 1 price (P1) = 127000 Comparable 1 weight (W1) = 20% Comparable 2 price (P2) = 131000…
Q: 50 Riverboat Adventures pays $310,000 plus $15,000 in closing costs to purchase real estate. The…
A: The process of determining, accumulating, and assigning costs to cost items like departments, goods,…
Q: The Company has three potential projects from which to choose. Selected information on each of the…
A: Capital budgeting is used to evaluate the projects. With the help of capital budgeting, the…
Q: Refer to the data provided in Table 11.3 below to answer the following question(s). Table 11.3…
A: Expected rate of returnThe expected rate of return implies the anticipated gain or loss an investor…
Q: Year NOI 1 $ 1,030,000 2 1,030,000 3 1,030,000 4 1,210,000 5 1,260,000 6 1,310,000 7 1,349,000 8…
A: Capitalisation RateThe capitalization rate, often referred to as the cap rate, is a key metric used…
![Using the information from the three office building land sales. Assume that you are valuing a similar building of 30,000 square feet. What is the
appropriate land value?
Sales Price
Building Size
Land Size
Sale 1
$550,000
27,500 SF
2.50 acres
Sale 2
$625,000
31,250 SF
2.50 acres
Sale 3
$650,000
32,500 SF
3.25 acres](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbed62f4d-6982-4292-913e-90b360fd70e6%2Fed1cf271-6109-45cf-a182-bdf9ca35d2d5%2Fx8x00kw_processed.jpeg&w=3840&q=75)
![](/static/compass_v2/shared-icons/check-mark.png)
Step by step
Solved in 4 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
- еВook Show Me How Print Item Average Rate of Return The following data are accumulated by Lone Peak Inc. in evaluating two competing capital investment proposals: 3D Printer Truck Amount of investment $76,000 $48,000 Useful life 4 years 7 years Estimated residual value Estimated total income over the useful life $7,600 $12,600 Determine the expected average rate of return for each proposal. If required, round your answers to one decimal place. 3D Printer % Truckfind the expected return for investing in buildings in a metro area where the following three buildings are for sale: The cost of the building is $4 million, the total rents are $500,000 and the total expenses are $300,000. The cost of the building is $90 million, the total rents are $35 million and the total expenses are $24 million. The cost of the building is $21 million, the total rents are $6 million and the total expenses are $3 million..It is not easy to obtain the building or parcel prices of income-generating real estates of similar qualities. Assuming you have the income and selling prices given in the table below, what is the most reasonable price of a property with a revenue of $16,000? Net Operating Income sale price real estate 1 $15,000 $ 115,400 real estate 2 20,000 166,700 real estate 3 12,500 100,000 real estate 4 18,000 140,600 the real estate in question 16,000 ?
- Scenario 2: Bremily Firewood Company is expanding their operations. The company has an expansion budget of $1,000,000 to use for contracting with local land owners. The company can contract with one, multiple, or zero local land owners. Assume the company has a MARR of 10% per year. 2C. Use the following information to determine which land parcels Bremily should contract with. Assume there is only one of each land parcel available and each parcel has an expected life of 6 years. Land Parcel Initial Owner Net Present Value Cost Peterson $564,000 $473,000 Johnson $475,000 $351,000 Smith $268,000 $194,000 Jefferson $832,000 $609,000 What is the best land parcel, or combination of land parcels, for Bremily Company to contract with? Note: Enter you answer as the number of each parcel (0 or 1) the company should choose.A builder is offering $131,554 loans for his properties at 9 percent for 25 years. Monthly payments are based on current market rates of 9.5 percent and are to be fully amortized over 25 years. The property would normally sell for $140,000 without any special financing. Required: a. At what price should the builder sell the properties to earn, in effect, the market rate of interest on the loan? Assume that the buyer would have the loan for the entire term of 25 years. b. At what price should the builder sell the properties to earn, in effect, the market rate of interest on the loan if the property is resold after 10 years and the loan repaid? Complete this question by entering your answers in the tabs below. Required A Required B At what price should the builder sell the properties to earn, in effect, the market rate of interest on the loan? Assume that the buyer would have the loan for the entire term of 25 years. (Do not round intermediate calculations. Round your final answer to the…More real estate Consider the Albuquerque home sales from Exercise 29 again. The regression analysis gives the model Price = 47.82 + 0.061 Size. a) Explain what the slope of the line says about housing prices and house size. b) What price would you predict for a 3000-square-foot house in this market? c) A real estate agent shows a potential buyer a 1200-square- foot home, saying that the asking price is $6000 less than what one would expect to pay for a house of this size. What is the asking price, and what is the $6000 called?
- Quantum Logistics, Inc., a wholesale distributor, is considering the construction of a new warehouse to serve the southeastern geographic region near the Alabama–Georgia border. There are three cities being considered. After site visits and a budget analysis, the expected income and costs associated with locating in each of the cities have been determined. The life of the warehouse is expected to be 12 years and MARR is 15%/year.Solve, a. What is the present worth of each site? b. What is the decision rule for determining the preferred site based on present worth ranking? c. Which city should be recommended?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.…Sky High Partners is evaluating a high-rise office building to add to its investment portfolio. To calculate a value, Sky High plans to use the income approach, based on the following estimates: Gross potential yearly rental income Estimated vacancy rate Yearly operating costs Market capitalization rate a. Compute the net operating income (NOI) for the building. Net operating income $ Valuation $ 890,000 2.75% $ 417,000 14% 448,525 b. Using the income approach, calculate the value for the office building. Note: Round your answer to the nearest whole number.
- SUBJECT: ENGINEERING ECONOMICS NOTES: 2 DECIMAL ONLY MUST BOX THE FINAL ANSWERS SOLUTIONS MUST BE CLEAR AND UNDERSTANDABLE MUST HAVE GIVEN, FORMULA TO BE USED, SOLUTIONS, ANSWER QUESTION: A commercial rental property is offered for sale and consists of a two-storey building in a business district of small city. A prospective purchaser estimated that if he buys his property he will hold it for about 10 years. He estimates that the average annual receipts from rentals during this period will be P70,000 and the average annual expenses for all purposes in connection with ownership and operation will amount to P27,000. He believes that the property can be sold for a net of P400,000 at the end of 10 years. He considers a minimum rate of return of 7%. On the basis of the above estimates, using the Annual Worth method, what price for this property would just permit him to recover his investment at 7% return?suppose you buy land for $2,800,000 and spend $1,100,000 to develop the property.You then divide the land into lots as follows:Category Sale Price per Lot15 Hilltop lots................15 Valley lots.................$510,000$240,000How much did each Hilltop lot cost you?a. $176,800b. $83,200c. $510,000d. $36,667Question #1a) What is a âtransfer price?âb) List and describe 3 main reasons for using transfer prices.Question #2Consider the following information about a potential project:Investment requiredExpected annual project revenueExpected annual project expensesRequired rate of returnCurrent division return on investment$3,000,000$6,000,000$5,550,00011%18%a) Calculate the projectâs return on investment.b) Based solely on ROI, is this project in the firmâs best interests? Why or why not?c) Is this project in the division managerâs best interests? Why or why not?d) Perform DuPont Analysis on this project.e) What is the projectâs residual income?Question #3List and describe five traits that can differentiate a customer that is relatively inexpensive to service from a customer that is relatively expensive to service.Question #4List and describe five actions a firm can take if a customer appears…
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)