please help me to solve this question On January 1, Pete Rowe bought a ski chalet for $55,000. Pete is renting the chalet for $63 per night. He estimates he can rent thechalet for 180 nights. Pete's mortgage for principal and interest is $456 per month. Real estate tax on the chalet is $580 per year. Peteestimates that his heating bill will run $50 per month. He expects his monthly electrical bill to be $25 per month. He pays $10 permonth for cable television.a. What is Pete's return on the initial investment for this year?Note: Round your answer to the nearest tenth percent.Pete's return%b. Assume rentals drop by 20% and monthly bills for heat and electricity drop by 15% each month. What would be Pete's return oninitial investment?Note: Round your answer to the nearest tenth percent.Pete's return%

Return on investment is calculated by dividing by net profitby the cost of investment. A high ROI…

Answered: On January 1, Pete Rowe bought a ski…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On January 1, Pete Rowe bought a ski chalet for $51,000. Pete is renting the chalet for $55 per night. He estimates he can rent the chalet for 190 nights. Pete's mortgage for principal and interest is $448 per month. Real estate tax on the chalet is $500 per year. Pete estimates that his heating bill will run $60 per month. He expects his monthly electrical bill to be $20 per month. He pays $12 per month for cable television. a. What is Pete's return on the initial investment for this year? (Round your answer to the nearest tenth percent.) Pete's return % b. Assume rentals drop by 30% and monthly bills for heat and electricity drop by 10% each month. What would be Pete's return on initial investment? (Round your answer to the nearest tenth percent.) Pete's return %
Art Neuner, an investor in real estate, bought an office condominium. The market value of the condo was $280,000 with a 80% assessment rate. Art feels that his return should be 10% per month on his investment after all expenses. The tax rate is $32.50 per $1,000. Art estimates it will cost $275 per month to cover general repairs, insurance, and so on. He pays a $140 condo fee per month. All utilities and heat are the responsibility of the tenant. Calculate the monthly rent for Art.
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