QUESTION 19 You buy the property at the price of $7,000,000, and it is expected to generate $468015 net operating income in the following year. What is your 'going in' Cap Rate at purchase? Write your answer in percent, but do not include the % sign (e.g. if you get 5.63898%, write 5.64).
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- f you think you can sell an asset for $15,000 in eight (8) years and you think the appropriate discount rate is 5%, how much would you be willing to pay for the asset today? Select one: a. $15,000 b. $10,153 c. $11,236 d. $15,771.00 e. None of the aboveJullo Company is considering the purchase of a new bubble packaging machine. If the machine will provide $20,000 annual savings for 10 years and can be sold for $50,000 at the end of the period, what is the present value of the machine investment at a 9% interest rate with savings realized at year end?Lease versus Buy Consider the data in Problem 19-1. Assume that RCs tax rate is 40% and that the equipments depreciation would be 100 per year. If the company leased the asset on a 2-year lease, the payment would be 110 at the beginning of each year. If RC borrowed and bought, the bank would charge 10% interest on the loan. In either case, the equipment is worth nothing after 2 years and will be discarded. Should RC lease or buy the equipment?
- 1. You are considering the purchase of an apartment building with the following information: Purchase price Expected year 1 NOI Expected annual NOI growth Expected Exit Cap Rate Holding Period $12,500,000 $1,000,000 4% 8.5% 3 years Solve for each of the following: Initial (going in) cap rate Expected sales price end of year 3 Net Present Value at 9% Discount Rate IRR Would you buy this asset for $12,500,000? Why or why not?F3 You purchase a mixed use building in Queens that is expected to generate $845209 net operating income (NOI) in the following year. You finance your purchase with an $8,000,000 interest-only loan at a rate of 6.93%, compounded annually, with annual payments. What is your net income expected to be in the following year? State your answer as a number rounded to the nearest cent (e.g. if you get $13.57654, write 13.58)If a $15,000 investment earns a 6 percent annual return, what should its value be after 4 years? Use Exhibit 1-A. Multiple Choice O O $18,930 $18,600 $15,045 $19,900 $15,900
- Suppose you sell a fixed asset for $125,000 when its book value is $139,000. If your company's marginal tax rate is 30%, what will be the effect on cash flows of this sale (i.e., what will be the after-tax cash flow of this sale)? Group of answer choices a. $120,080 b. $129,200 c. $9,800 d. $14,000Not use excel Q)You are evaluating two options for purchase of equipment. The first option is to purchase the item outright for $15,000. The second option is to put $5,000 down and pay the remaining off over the next 5 years at 18% per year. How much extra would option two cost? a. $5,250 b. $6,000 c. $5,000 d. $2,000 please resolve it clearly15. You have some property for sale and have received two offers. The first offer is for $189,000 today in cash. The second offer is the payment of $100,000 today and an additional $100,000 two years from today. If the applicable discount rate is 8.75%, which offer should you accept and why? ● ● Notes: Interest rates are given as annual rates. If the payments are monthly, then the annual interest rate needs to be divided by 12 in order to get the rate per month. Use monthly rates in your calculations when the payments are monthly. Similarly, if the payments are monthly, then N is the number of months (not the number of years). Unless stated otherwise, assume that annuity payments occur at the end of the period (ordinary annuity) Upload an Excel, Word, or PDF file showing the answer and the supporting calculations. Clearly show your work with all steps included. If you are using mathematical formulas, write the formulas with all steps to get to the answer. If you are using a financial…
- [Question 9 You have some property for sale and have received two offers. The first offer is for RM89,500 today in cash. The second offer is the payment of RM35,000 today and an additional guaranteed RM70,000 two years from today. If the applicable discount rate is 11 percent, which offer should you accept and why? Select one: A. You should accept the RM89,500 today because it has the lower future value. B. You should accept the second offer because it has the larger net present value. C. You should accept the first offer as it is a lump sum payment. D. You should accept the RM89,500 today because it has the higher present value.What is the present value of $3,000 received a. 10 years from today if the interest rate is 4% per year? b. 20 years from today if the interest rate is 8% per year? Question content area bottom Part 1 a. The present value is $enter your response here. (Round to the nearest cent.) b. The present value is $enter your response here. (Round to the nearest cent.)Future Value You invest $1,000 today and exect to sell the investment for $2,000 in 10 years. a. Is this a good deal if the investment rate is 6%? b. What if the interest rate is 10%? Why ? Show the calculations in Excel.