You purchased a warehouse eight years ago for P3.5M. Since then you had rented it out for P240,000.00 per year, incurring P55,000.00 per year for repairs and maintenance. Five years ago you spent P250,000.00 for roof replacement and you increased the annual rent to P300,000.00 the succeeding year. If you decide to sell the warehouse for P5.4M to a willing buyer now, evaluate your investment using future worth analysis and a 12.5% rate of return. Ans: -P1,328.417.25

Q: Your brother owns a commercial electrical company. A friend of his is retiring and has offered to…

A: The PV of an investment refers to the combined value of the cash flows of the investment assuming…

Q: An investor purchases a plot of land for £400,000 and intends to construct a building which will be…

A: First, we will find the Rental income after considering a 5% increment every year then we will…

Q: Emerson developed a new style of camping trailer. He is considering a licensing agreement with​…

A: Step 1:Since the payments are made yearlybut interest rate is compounded semi-annually is 5.9%. We…

Q: A property was bought for 100 million and was sold 10 years later for $240 million. The property was…

A: Solution- Given that Property bought=100 million Sold=$240 million Interest on mortage=3.75% Per…

Q: The nihilist Jokubas is setting up a recording studio which will have an annual revenue of $80,000…

A: The NPV is the present value of benefits less the initial costs.

Q: Pink Petunias, a wholesale nursery, is considering purchasing a new plot of land for their business…

A: Payback period is the length of time in which an investment reaches its break-even point. In other…

Q: u bought a house for $400000 and made a downpayment of $100000. You make payments at the end of each…

A: we Need to calculate the  payment at the end of year than the down payment is considered and…

Q: Mr Moosa has took a laptop (Which costs OMR 350) for lease from Mr Fahad for 11 months period. As Mr…

A: As per standard, Lessees will be required to recognize the right of use of asset and the lease…

Q: Droid buys a vintage pacman machine for $12000. Since he doesn't know when he'll get another chance…

A: The value of loan is determined with the help of checking the monthly payment along with the…

Q: The nihilist Ivan is setting up a recording studio which will have an annual revenue of $70,000 and…

A: The Net Present value is an important technique of capital budgeting. It considers the time value of…

Q: A Filipino contractor in the USA plans to purchase a new office building costing P1,000,000. He…

A: Purchase price:If we buy goods, property, or any other asset we have to pay the cost of that…

Q: A family wants to purchase a house that costs $135,000. They plan to take out a $125,000 mortgage on…

A: A mortgage is a loan on a property where the collateral is the property itself.

Q: ear ago the Jenkins Family Fun Center deposited $5000 in an investment account for the purpose of…

A: Future value of amount includes the amount being deposited and interest amount account accumulated…

Q: or buys a land for PhP 1M and constructs a three-door apartment for students worth PhP 5M. He…

A: IRR is internal rate of return achieved on the investment where the present value of cash flow is…

Q: An investor has owned a property for five years. A property could be sold today for $2 million. It…

A: Current selling price of land = $2,000,000Loan balance = $1,000,000Total in taxes = $250,000IRR for…

Q: Howell Petroleum, Incorporated, is trying to evaluate a generation project with the following cash…

A: Cash flow in year 0=-$44,500,000Cash flow in year 1=$70.500,000Cash flow in year…

Q: Let's say that the rights to Frederico John Michael's masterpiece “the paintings” are to be…

A: Capital budgeting is the process by which a corporation examines potential large projects or…

Q: Your company purchases a new building for $500,000. The upkeep and maintenance of the building ends…

A: Initial cost is $500,000. The annual cost is $10,000. The period is 20 years. The interest rate is…

Q: Jayco, Inc. would like to set up a new plant. Currently, Jayco has the opportunity to buy an…

A: Net present value of this project needs to be determined to understand if the project can be…

Q: Four years ago, an investor purchased a five door-apartment for P5.5M. Income from rent exceeded…

A: Purchase price (P) = P 5.5 M Annual surplus (A) = P 0.48 M Tax rate = 8.25% Selling price after tax…

Q: ou manage an ice cream business and want to buy a new store from which to operate. The sales price…

A: The requirement is to compute the NPV of the project and make recommendations on whether the family…

Q: You are trying to evaluate the feasibility of purchasing a quarter-acre plot (approximately 11,000…

A: Here,After-Tax Receipts of Rent is US$2,500After Tax Proceeds of Sale of land after 10 years is…

Q: Mr. Russ T. Steele sells his old vehicle for $5000 (you get more if you private sale!) and pays cash…

A: The Equivalent Annual Cost: The Equivalent annual cost gives an estimate of the equivalent equal…

Q: Sally Seashell bought a lot at the Salty Sea for $50,000 cash. She does not plan to build on the…

A: rate of return is the rate the investment generates while holding it, It is basically the IRR of the…

Q: A)Dan's real estate buys a 50,000 sq foot warehouse for $1,000,000. They financed the purchase with…

A: Company is earning regular profits from the operating activities conducted. The profit that remains…

Q: will make a down payment of ge a mortgage for the rest at 5 pounded semi-annually for 25 rmine the…

A: Mortgages are to be paid by the monthly payment that includes the payment for principal and interest…

Q: Tamily purchas a second home to use for short term rentals near the beach. If it purchases the…

A: in this problem we have to find out present value FACTOR and from that we will get effective…

Q: You’ve spent $10,000 searching for an investment property. Now, you’re considering investing in a…

A: Here,To Find:Net present value (NPV) =?Internal rate of return (IRR) =?

Q: Mr. Illeto received two offers on a property that he wants to sell Ms. Lei has offered Php…

A: Determine the market value of both the offers by calculating the present value of each offer.…

Q: Ssume you are buying an apartment with $ 500,000. Consider you make 8% per year (i=8%) on this…

A: Capital recovery amount is that amount which should be recovered.

Q: Jose buys a car that costs P1.3M and he plans to resell it for P100K after 10 years. How much is the…

A: Formula: Depreciable cost = Asset cost - Salvage value

Q: Five years ago, Bob purchased an apartment in Tai Po of $2,000,000. He made a down payment of 30%…

A: Mortgage is the term used for financing or using the money against the asset for which lender owes…

Q: Shanice bought the car for $28,430. The value of the car is predicted to depreciate to $13,590 after…

A: Exponential depreciation is a financial concept that describes the rapid decrease in the value of an…

Q: 2. You purchased a building five years ago for $200,000. Its annual maintenance expense has been…

A: Net Present Value: It is the tool used for analyzing Profitability of a projected investment   For…

Q: When there is little or no inflation, a homeowner can expect to rent an unfurnished home for 12% of…

A: The after-tax rate is the return that is adjusted for tax & is being generated by investing in a…

Q: Which of the following sets of Excel entries will correctly solve this problem: Jim paid $138,000…

A: Future value is the value of present cashflow at future date compounded at the specified rate.

Q: The owner of a pizza restaurant needs to buy a new pizza oven for the restaurant. The oven costs…

A: 1. Depreciation Expense:The oven has a cost of $450 and a useful life of 5 years.We're using the…

Mortgages

A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.

Mortgage

The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.