please solve with formulas like (F/P, 5% , n) no with the excell. D.1. Your client asks you to check on the feasibility of constructing an apartment house with as follows: current income = $100,000/yr gradient increase in income $ 10,000/yr/yr current costs= $ 60,000/yr gradient increase in costs $ 5,000/yr/yr %3D The resale value is expected to equal the current construction costs now, escalating at a f2 percent per vear comnounded until resale in 10 years. What can he afford to cons

please solve with formulas like (F/P, 5% , n) no with the excell. D.1. Your client asks you to check on the feasibility of constructing an apartment house with as follows: current income = $100,000/yr gradient increase in income $ 10,000/yr/yr current costs= $ 60,000/yr gradient increase in costs $ 5,000/yr/yr %3D The resale value is expected to equal the current construction costs now, escalating at a f2 percent per vear comnounded until resale in 10 years. What can he afford to cons

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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in 1. Calculate the Annual rate of return. Solving for Rates - Excel HOME INSERT PAGE LAYOUT FORMULAS DATA REVIEW VIEW Calibri, BIU - A- Alignment Number Conditional Format as Cll Formatting Table Styles 国 Paste Cipboard H. 1. D. E. C. 3. What annual rate of return is earned on a $5,000 investment when it grows to $10,750 in six years? (Do not round intermediate calculations and round your final answer to 2 decimal places. Present value Future value Number of periods 0000 2410,750 Complete the following analysis. Do not hard code values in your calculations. 28 of 40 ere to search %23
Your friend would like to add an addition to the home. The home was originally purchased for $175,000. The addition would cost $38,000. You expect the addition can improve its value by 4% 1. What is the ROI (write as a percentage)? 2. Is it a good idea (Yes or No, based on ROI)?
Use Goal seek on the loan amount of $825,000. You would like the monthlypayment to be $4500.00. Find a solution for new loan amount, term, and Interestrate. Do not overwrite the Existing data on D3. Hint: Use Cancel when goal seekfinds a solution. Write the solution in the space provided on a spreadsheet.
Determine the best course to take next quarter, using the following criteria. a. Maximaxb. Maximin 2. The owner of the Columbia Construction Company must decide between building a housing development, constructing a shopping center, and leasing all the company's equipment to another company. The profit that will result from each alternative will be determined by whether material costs remain stable or increase. The profit from each alternative, given the two possibilities for material costs, s shown in the following payoff table: Material Costs Decision Stable Increase $70,000 105,000 Houses $30,000 20,000 40,000 Leasing 40,000 Determine the best decision, using the following decision criteria. a. Maximax b. Maximin c. Minimax regret d. Hurwicz (a = .2) e. Equal likelihood %3D 3. A local real estate investor in Orlando is considering three alternative
You are considering buying an old warehouse that you will convert into anoffice building for rental. Assuming that you will own the property for 10 years, how much would you be willing to pay for the old house now given the following financial data?I. Remodeling cost at period 0 = $550,000;II. Annual rental income = $800,000;Ill. Annual upkeep costs (including taxes)= $80,000;lV. Estimated net property value (after taxes) at the end of 10 years = $2,225,000;V The time value of your money (interest rate)= 8% per year.(a) $4,445,770(b) $5,033,400(c) $5,311,865(d) $5,812,665
3. A real estate company is considering the investment on two types of apartments: condo apartments and two-bedroom apartments. The expected profits for the two types at different scenarios and the corresponding probabilities are shown in Table 3. Before starting to profit, the company should first invest on the two types of apartments for 20 billion RMB on A1 and 15 billion RMB on A2 respectively. Please decide by calculation which type of apartments is worth investing for this company? Table 3 Expected profits by different scenarios (The profits are in billion RMB Yuan) Expected Sale Forecast Good Normal Bad Types/Probabilities 0.5 0.3 0.2 Condo (A,) 50 25 15 Two-bedroom (Az) 80 0. -25 3/3 1L
You are setting up the shown ONE-WAY data table to calculate the NPV of a hotel project at various rates of return (8.25% to 12.5%). What range would you highlight before selecting: Data → What-if Analysis → Data Table… Question 51 options: B15:C32 C14:C32 B14:B32 B14:C32
Assuming that you would like to buy an equipment for your small business. Using the information below, calculate the Rate of Return and the Pay Back Period for the investment. After presenting your calculations, explain why you think this will (or will not) be a good investment. Here are the numbers: Cost of the investment is $100,000 Estimated depreciable life of investment is 5 years Annual depreciated charge is $15,000 Estimated average profit over depreciable life is $10,000.
A new homeowner is purchasing a living room set for $2,590 and must decide between two monthly installment financing offers.Offer 1: $200 down payment, remaining balanced financed at a 24.90% interest rate for 3 years.Offer 2: $425 down payment, remaining balanced financed at a 22.90% interest rate for 4 years.Part A: What is the total cost of offer 1? Explain which technology you used to solve and each step of your process. Part B: What is the total cost of offer 2? Explain which technology you used to solve and each step of your process.Part C: Which financing offer should the new homeowner choose?
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?
Evaluate the NPV for a green building with the following cost and savings data. Use a discount rate equal to the current market rate of return (mid-March 2020) - 7% annually. Show gross and net PV calculations (ROI not necessary): a. Incremental costs for achieving LEED credits: $50,000 b. Year 1 savings: $12,550 c. Year 2 savings: $12,100 d. Year 3 savings: $11,900 e. Year 4 savings: $11,750 f. Year 5 savings: $11,550
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.

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