FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Use the following information to answer the questionsProperty:Purchase Price$7,017,000Acquisition Costs$0Year 1 PGI$1,263,060PGI Growth Rate/year4.0%Year 1 Miscellaneous Income$0Miscellaneous Income Growth Rate/year0.0%Annual Vacancy and Collection Losses/year11.0%Year 1 Operating Expense$415,926Operating Expense Annual Growth Rate2.8%Year 1 Capital Expenditures$38,220Capital Expenditures Annual Growth Rate1.6%Holding period (years)5Property to be sold for NOI6 capitalized at (Terminal Cap Rate):7.5%Selling Expenses in year 56.5%Financing:LTV67%Loan Costs (% of Mortgage Value)1.40%Loan term (years)30Monthly Amortization / monthly paymentsLoan is a 2/2 ARMLoan Rate = T-Bill + 0.37%Teaser Rate3.420%T-Bill Rate at Initiation2.990%T-Bill on Reset Date 15.540%T-Bill on Reset Date 25.910%T-Bill on Reset Date 36.850%T-Bill on Reset Date 47.250%T-Bill on Reset Date 58.120%T-Bill on Reset Date 68.900%Pre-tax Required Return32.00%
1-Find the annual debt service in year 3
2-Find the Annual Debt Service in Year 4
3-Find the annual debt service in year 5
4-Find LEVERED BTCF in Year 3 (Round your answer to the nearest dollar):
5-Find Levered BTCF in Year 5
6-Find the LEVERED
7-Find the LEVERED
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- mgarrow_forwardBlue Spruce Inc. manufactures basketballs for professional basketball associations. For the first six months of 2022, the company reported the following operating results while operating at 90% of plant capacity: Sales Cost of goods sold Selling and administrative expenses Net income Amount $5,049,000 3,465.000 445,500 $1.138,500 Per Unit $51.00 35.00 4.50 $11.50 Fixed costs for the period were cost of goods sold of $990,000, and selling and administrative expenses of $178.200. In July, normally a slack manufacturing month, Blue Spruce receives a special order for 9.900 basketballs at $32,00 each from the Italian Basketball Association. Accepting the order would increase variable selling and administrative expenses by $0.75 per unit because of shipping costs, but it would not increase fixed costs and expenses.arrow_forwardVishnuarrow_forward
- >Unit-of-production method This method amortizes the costs of oil and gas industry activities and is dependent on the accounting method chosen by the owner of the assets. The following general formula shows the concept of unit-of- production amortization: [unamortized costs at end of period]+|production for period [Amortization for period]=! reserves at the beginning of periodarrow_forwardIt is due today. Please help! Can you help me find/solve the following? 1. PRIME COST (F+B+LABOR) 2. TOTAL COSTS OF SALES 3. TOTAL GROSS PROFIT 4. TOTAL INCOME 5. TOTAL INCOME LESS CONTROLLABLE 6. TOTAL OCCUPANCY COSTS 7. INCOME BEFORE INT, DEPR & TAX 8. TOTAL INTEREST EXPENSES 9. TOTAL DEPRECIATION EXPENSES 10. NET PROFIT or (LOSS)arrow_forwardResidual Income = $23000 Operating income = 35,844 Cost of Capital = 12% What is return on investment? Don't round any intermediate calculations. Enter your answer to one decimal place. Do not use commas, percentage or dollar signs.arrow_forward
- eBook Determining missing items in return on investment and residual income computations The following table presents various rates of return on investment and residual incomes: InvestedAssets OperatingIncome Return onInvestment MinimumRate ofReturn MinimumAcceptableOperatingIncome ResidualIncome $980,000 $215,600 (a) 12% (b) (c) 520,000 (d) (e) (f) $62,400 $20,800 320,000 (g) 14% (h) 35,200 (i) 240,000 50,400 (j) 12% (k) (l) Determine the missing items, identifying each item by the appropriate letter. Round dollar amounts to the nearest whole number. Answer a. fill in the blank 1 % b. $fill in the blank 2 c. $fill in the blank 3 d. $fill in the blank 4 e. fill in the blank 5 % f. fill in the blank 6 % g. $fill in the blank 7 h. fill in the blank 8 % i. $fill in the blank 9 j. fill in the blank 10 % k. $fill in the blank 11 l. $fill in the blank 12arrow_forwardPurchase price $800,000 LTV 75% Term & Am 15 years Interest rate 4% Closing costs $12,000 Holding period 6 years Annual income taxes (below) Marginal tax rate 30% (aka ordinary inc tax) Taxes due on sale $200,000 Discount rate (before tax) 15% Selling expenses 3% Exit cap rate 5% Operations YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 NOI $ 33,000 $ 38,000 $ 41,000 $ 47,000 $ 51,000 $ 56,000 $61,000 САРЕХ $ (5,000) $_(6,000) $ (Z,000) $(8,000) $ (9,000) $(10,000) PBTCF $ 28,000 $ 32,000 $34,000 $ 39,000 $ 42,000 $ 46,000 Income taxes on annual $ (5,000) $ (6,000) $ (7,000) $ (8,000) $ (9,000) $ (10,000) operations What is the before tax IRR for this investment? 20.05% O None of these are correct O -17.23 % O 20.23 % 19.09 %arrow_forwardPlease do not give solution in image format thankuarrow_forward
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