You purchased a warehouse eight years ago for P3.5M. Since then you had rented it out for P240,000.00 per year, incurring P55,000.00 per year for repairs and maintenance. Five years ago you spent P250,000.00 for roof replacement and you increased the annual rent to P300,000.00 the succeeding year. If you decide to sell the warehouse for P5.4M to a willing buyer now, evaluate your investment using future worth analysis and a 12.5% rate of return. Ans: -P1,328.417.25

Q: Required: a. What should be the present value of the property today? b. What should be the property…

A: Given Information: Year12345Cash Flows234000244000254000264000274000Required Rate10%

Q: Robin Williams has just purchased some equipment for his business. For this equipment he must pay…

A: In finance and investment analysis, Present Value refers to the current worth or value of a future…

Q: You purchased a machine for $1.09 million three years ago and have been applying straight-line…

A: Purchase cost = $1,090,000 Life = 7 Years Used period = 3 years Tax rate = 0.22 Sale value =…

Q: You purchased a machine for $1.09 million three years ago and have been applying straight-line…

A: Purchase cost = $1,090,000 Life = 7 Years Used period = 3 years Tax rate = 0.38 Sale value =…

Q: e that you are planning to buy a property producing natural resources.   You think you will keep the…

A: Future value should include value that much is paid today and plus interest that will be accrued on…

Q: which he bought for P50,000 when new will be useful for 10 years and a junk value of 1,000 but…

A: Cash Flow is a part of the Financial Statement of a company. It literally means a report that shows…

Q: What is the net present value of this project?

A: NPV represents the difference between the present value of expected cash inflows (revenues, savings,…

Q: A property was purchased for $4,500,000.00 and cars a rental income of S50,000.00 per month. Mr.…

A: ANSWER:

Q: A certain property is being sold and the new owner received two bids. The first bidder offered to…

A: Present value (PV) is the current value of a future sum of money of cash flows given a specified…

Q: A realtor found a deal on a housing development and thinks it can be sold for $658,813 in 4 years…

A: Present value is a tool used to determine the value of a payment on the present date expected to be…

Q: 1. Draw the cash flow diagram for the investment above. Find the Present Worth (PW) or Net Present…

A: First let us build a timeline with the expected cash flows using the formula below: Net cash flow =…

Q: The capital cost of a property is $5900000. A CCA rate of 20% is applied. The tax rate is 30%. Take…

A: A) Closing book value of Property Year Opening value ($) CCA @ 20% Closing Value ($) 1 5900000…

Q: An investor has owned a property for five years. A property could be sold today for $2 million. It…

A: Current selling price of land = $2,000,000Loan balance = $1,000,000Total in taxes = $250,000IRR for…

Q: You purchased a machine for $1.17 million three years ago and have been applying straight-line…

A: Straight Line depreciation= (Costs-Salvage Value)/Useful Lif= (1170000-0)/7= $…

Q: You purchased a building 5 years ago for P 5M. Its annual maintenance expense has been P 250,000 per…

A: Cash Flow Diagram: It consists of a horizontal line that represent income and expenses over  time…

Q: A real estate investor is considering purchasing a small warehouse Analysis has resulted in the…

A: After-tax cash flow refers to the amount of money a business or individual has available for…

Q: Your company purchases a new building for $500,000. The upkeep and maintenance of the building ends…

A: Initial cost is $500,000. The annual cost is $10,000. The period is 20 years. The interest rate is…

Q: You purchase a quarter section (160 acres) of land for $176,000 today and sell it in exactly 9 years…

A: Formula to calculate rate of interest under compound interest is: i = n[(A/P)^1/nt - 1] Where n is…

Q: Four years ago, an investor purchased a five door-apartment for P5.5M. Income from rent exceeded…

A: Purchase price (P) = P 5.5 M Annual surplus (A) = P 0.48 M Tax rate = 8.25% Selling price after tax…

Q: A man purchased a house for P425,000. In the first month that he owned the house, he spent P75,000…

A: Following is the timeline of given case Month 0 - Purchased the house Month 1 - Spent on repairing…

Q: 4 b) Your company wants to purchase a phtostat machine which costs RM15,000. It will be obsolee in 5…

A: Lease Option is that option under which buyer would pay the fixed amount every year against taking…

Q: Edmund spent the following amounts for the maintenance of the machine she bought: PhP 4,000 each…

A: Let the cost in year n = Cn C1 = Php 4000 C2 = Php 4000 C3 = Php 4000 C4 = Php 4000 + Php 15000 =…

Q: You purchased land 3 years ago for $50,000 and believe its market value is now $60,000. You are…

A: Net Present Value (NPV) is a financial metric used to evaluate the profitability of an investment or…

Q: Mr. Russ T. Steele sells his old vehicle for $5000 (you get more if you private sale!) and pays cash…

A: The Equivalent Annual Cost: The Equivalent annual cost gives an estimate of the equivalent equal…

Q: 1. You purchased two condos for $100,000 cash down, with loan and insurance payments of $1,500 3…

A: The downpayment on the condos: The downpayment of $100,000 has already been paid in full and will…

Q: Barbara Thompson is considering the purchase of a piece of business rental property containing…

A: Given information: Initial investment on a property is $350,000. An annual receipt as rent is…

Q: Mr. Illeto received two offers on a property that he wants to sell Ms. Lei has offered Php…

A: Determine the market value of both the offers by calculating the present value of each offer.…

Q: Jose buys a car that costs P1.3M and he plans to resell it for P100K after 10 years. How much is the…

A: Formula: Depreciable cost = Asset cost - Salvage value

Q: You have an opportunity to acquire a property from First Capital Bank. The bank recently obtained…

A: Property Costs  $      2,00,000.00 Acquisition related expenses  $         10,500.00 Repair…

Q: Seller offers a 10% discount on their $150,000 home. You pay 20% down and get a loan from the bank…

A: Tax is defined as a payment which is required to be paid to the government by any individual, or…

Q: Bob buys a property that costs $1,000,000. The property is projected to generate NOI as follows:…

A: Internal Rate of Return (IRR) is a financial metric used to evaluate the profitability of an…

Q: 12. Marlon can purchase a company car for his real estate business for $30 000. Interest lost on the…

A: Part A. Calculation of cost of keeping the car for 5 years & selling it for $12,000 after 5…

Q: 2. You purchased a building five years ago for $200,000. Its annual maintenance expense has been…

A: Net Present Value: It is the tool used for analyzing Profitability of a projected investment   For…

Q: ou just purchased a parcel of land for $54,000. To earn a 11% annual rate of return on your…

A: FV = PV * (1 + r)^nWhere FV = Future ValuePV = Present Value of Land = $54,000r = rate of interest =…

Q: Allan buys a cellphone costing Php. 13,000. What is its value after 4 years if the rate of…

A: The question is related to the Depreciation Accounting and of reducing balance method of…

Q: A You have an opportunity to acquire a property from First Capital Bank. The bank recently obtained…

A: Future value of a present value is the value of that amount after taking into account the time value…

Q: The purchase price for a new home was $325,000. The buyer put down 20% and the balance was a…

A: It is the amount of tax levied on property. This amount will vary from county to country based on…

Q: You purchased a machine for $1.13 million three years ago and have been applying straight-line…

A: If machine is sold on the value above the book value of machine then there will be capital gains tax…

Q: nd spent the following amounts for the maintenance of the machine she bought: PhP 4,000 each yea…

A: Present value of future cash flow is value of money today that is equivalent to future cash flow…

Q: Engr. Dimaamin bought a concrete mixer costing P2,000,000 with a down payment of P600,000. He paid…

A: Here it is pertinent to note that the present value of all the payments made in order to purchase…

Q: What is the fair value forward price from your perspective?

A: We can determine the fair value of the property using the formula below:Fair value = Spot price…

Q: Suppose that you are considering speculating on some vacant land located on Bali Hai, an island in…

A: Future value of the acquiring amount and future value of growing annuity of the taxes, insurance…

Q: Mr. XYZ is an entrepreneur who is contemplating to buy a machine to increase the capacity of his…

A: The question is related to lease rent that makes  XYZ will be indifferent between buying and leasing…

Mortgages

A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.

Mortgage

The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.