A property was purchased 5 years ago for $1mil and provided NOI of $70,000 in Year 1, increasing at 5% per annum. What price would a potential buyer have to pay today; if income yields for the property have fallen by 1%? Select one: a. $1,122,341 b. $945,202 c. $1,488,995.17 d. $985,333 e. $1,215,506

An investor is considering purchasing a sale-leaseback with the following 10-year cash flows: ΕΟΥΙ Cash Flows + 0 1 $350,000 2 $357,000 3 $364,140 4 $371,423 5 $378,851 6 $386,428 7 $394,157 8 $402,040 9 $410,081 10 $418,282 + Sale Proceeds $5,333,000 If the seller/lessee in the previous question insists on a purchase price of $5,000,000 today, what would the investor's yield be? 9.56 percent 7.66 percent 8.22 percent 8.03 percent

Which is the answer?

10

2. Suppose that you are considering speculating on some vacant land located on Bali Hai, an island in the South Pacific. You could acquire the land today for $850,000. You plan on holding it for fifteen years and then selling it. Annual taxes, insurance and upkeep (mowing, clearing of debris, etc.) of the land will be $35,000, paid at the end of the first year. These costs will increase annually at a 2.5% rate until you sell the land at the end of the fifteenth year. If you require an annual rate of return of 20%, what is the minimum amount that you have to net (after commissions, transfer taxes, fees, etc.) on the sale of this land at the end of the final year to earn your required rate of return? (Ignore income taxes)

Suppose that the marginal tax rate is 15%. If a farmer decides to purchase a combine it will increase his revenue by $6,000 per year, but it will also increase his expenses by $1,000 per year. The before tax rate on this investment is 25%. The life of this investment is 6 years. What is the present value of the after tax net return? $14,133 $12,544 $16,084 $13,706 None of the answers are correct

A.4

Question at position 4 A comparable property sold 10 months ago for $89, 500. If the appropriate adjustment for market conditions is negative 0.30% per month with compounding, what would be the adjusted price of the comparable property?

What is the project SVNOT of our PP&E if we bought it for $100,000 today, sell it for $50,000 in 3 years, tax rate of 20% and drepreciation schedule is 20%, 25%, 25%, 10%, 10%, 10% over 6 years?

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. $14,000