You want to value a property with an effective gross income of $53,000 and a NetOperating Income of $27,500. The table below summarizes the valuation andincome of comparable properties.Comp 1Comp 2Comp 3Price$300,000$350,000$375,000Gross Income$50,000$55,000$60,000% Operating50%55%$54%ExpenseNet OperatingIncome$25,000$30,000$32,500What value would a Gross Income Multiple approach yield (rounded to thenearest $100)?$329,200$325,000$330,000$316,900

To calculate the value using the Gross Income Multiple approach, we need to find the average Gross…

Answered: You want to value a property with an…

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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TJ Industries has revenue of $400,000 and expenses of $250,000. The depreciation cost is $80,000 and marginal tax rate is 35%. Calculate depreciation tax shield Group of answer choices 33,000 25,000 28000 15470
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Griffin's goat farm, Inc has sales of $666,000 costs of $328,000, depreciation expenses of $72,000 interest expense $46,000 and a tax rate of 24 percent. what is the taxable income? a. $167,200 b. 220,000 c. 266000 d. 52800 e. 292000
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Calculate the property tax rate required to meet the budgetary demands of the community. Note: When calculating budgetary demands, always round up. (Round your answers to two decimal places.) Property Tax Rate Total Assessed Total Community Property Таxes Per $100 (in $) Per $1,000 Valuation Required Percent Mills (in $) 4.95 $ 4.95 $ 49.47 32,600 Morningside $659,000,000 $32,600,000 %
purchase property that has an annual net income of 587000 and want to ear 8.25% on investment what do I pay for property
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Written report with the following content: • Appendix1: Leasing Explain the calculations. Your recommendations Objective: Should FFT lease or construct their own production facility Option 1: Construct Costs to incur: Buying land, construct building and getting ready for use (FFT has these funds available in their bank account today so no mortgage is needed) $ 1,200,000 Taxes, insurance, and repairs (per year) $110,000 Intended years of use 15 Projected market value in 15 years $ 1,250,000 Option 2: Lease Intended years of use 15 Deposit required today (this deposit will be returned to FFT when the lease contract is complete is 15 years) $ 100,000 Annual lease payment $ 160,000 Property taxes (annual) to be paid by FFT $ 15,000 Insurance (annual) to be paid by FFT $ 15,000 Required rate of return 8% Methodology: The consulting team is proposing to perform a NPV analysis and determine the benefit to leasing or construction. Based on the analysis, they will recommend the preferred option…
Book value Find the book value for the asset shown in the accompanying table, assuming that MACRS depreciation is being used Recovery period (years) 5 Elapsed time since purchase (years) 2 Asset A Installed cost $839,000 The remaining book value is $ (Round to the nearest dollar.) Data table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes Recovery year 1 2 3 4 5 6 7 8 3 years 33% 45% 15% 7% 9 10 11 Totals Percentage by recovery year* 5 years 7 years 20% 14% 32% 19% 12% 12% 5% 25% 18% 12% 9% 8% 7% 6% 6% 6% 4% 100% 100% 100% 100% *These percentages have been rounded to the nearest whole percent to simplify calculations while retaining realism. To calculate the actual depreciation for tax purposes, be sure to apply the actual unrounded percentages or directly apply double-declining balance (200%) depreciation using the half-year 10 years 10% 18%…
10. Calculate the assessed value (in $) and the property tax due (in $) on the property. (Round your answers to the nearest cent.) Fair MarketValue AssessmentRate AssessedValue PropertyTax Rate PropertyTax Due $342,900 72 $ 5.1% $
We now have $5,000 in assets and are given a choicebetween investment 1 and investment 2. With investment 1,80% of the time we increase our asset position by $295,000,and 20% of the time we increase our asset position by$95,000. With investment 2, 50% of the time we increaseour asset position by $595,000, and 50% of the time weincrease our asset position by $5,000. Our utility functionfor final asset position x is u(x). We are given the followingvalues for u(x): u(0) 0, u(640,000) .80, u(810,000) .90, u(0) 0, u(90,000) .30, u(1,000,000) 1,u(490,000) .7.a Are we risk-averse, risk-seeking, or risk-neutral?Explain.b Will we prefer investment 1 or investment 2?

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