Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Financial Accounting Expert

Task1. A real estate developer and operator plan to develop a new high-rise office building in North Dallas. Comparable buildings last 60 years, however the developer plans to sell it after 20 years for 40% of the construction cost. For the first 20 years it can be leased as Class A office space. When the building is sold, then the land's cost will be recovered in full (land value is approximate to go up 3% per year). Here are the estimated costs: $22M Land $41M Building (500,000 square foot) $6.4M Annual maintenance and operating – paid at the end of year 4% Annual property tax and insurance (% of initial investment) – paid at the end of each year

(a) If the company desires a 12% rate of return, what is required annual leasing income for the whole building? Use the technique of annual cash flow and then the technique of NPW to find the solution.

(b) Supposing an anticipated average occupancy rate of 90% (that is, on average 10% of the building are vacant at all times), what is minimum leasing price per square foot and year? Is this a reasonable price?

Financial Accounting, Accounting

  • Category:- Financial Accounting
  • Reference No.:- M93924

Have any Question? 


Related Questions in Financial Accounting

Mr doe was in a car accident as a result of his injuries he

Mr. Doe was in a car accident. As a result of his injuries, he received an insurance check for $8,000 from a self-insured plan. His medical bills relating to the accident were $5000 and were taken as a deduction on his t ...

Effect of transactions on accounting equation a a vacant

Effect of Transactions on Accounting Equation a. A vacant lot acquired for $115,000 is sold for $298,000 in cash. What is the effect of the sale on the total amount of the seller's (1) assets, (2) liabilities, and (3) ow ...

Jasper and crewella dahvill were married in year 0 they

Jasper and Crewella Dahvill were married in year 0. They filed joint tax returns in years 1 and 2. In year 3, their relationship was strained and Jasper insisted on filing a separate tax return. In year 4, the couple div ...

Exerciseworking backward dividends on the statement of cash

Exercise Working Backward: Dividends on the Statement of Cash Flows Stanton Corp. began operations on January 1, 2014. The statement of cash flows for the first year reported dividends paid of $160,000. The balance sheet ...

Which of the following items are exclusions from gross

Which of the following items are exclusions from gross income? Select all that apply. a. Alimony payments received b. Damages award received by the taxpayer for personal physical injury - none were punative damages. c. A ...

The finishing department had 13500 incomplete units in its

The Finishing Department had 13,500 incomplete units in its beginning Work-in-Process Inventory which were 100% complete as to materials and 30% complete as to conversion costs. 40,500 units were received from the previo ...

The golf manufacturing company of woods mickelson and

The golf manufacturing company of Woods, Mickelson and McIlroy show units to be produced as follows: April, 620; May, 680; June, 540. Each unit produced requires two hours of direct labor. The direct labor rate is curren ...

Steel company usa is a metal fabricating business that

Steel Company USA is a metal fabricating business that sells products mainly to the home construction market. The data table that follows should be used in this assignment. The problems are at the end of the data table. ...

In his book rewarding work how to restore participating and

In his book, Rewarding Work: How to Restore Participating and Self-Support to Free Enterprise (Harvard University Press, 197), economist Edmund Phelps offers this plan to help the working poor: apply tax credits for “qua ...

Jb 412 was one of the many jobs started and completed

Jb 412 was one of the many jobs started and completed during the year. The job required $9,500 in direct materials and 35 hours of direct labor time at a total direct labor cost of $10,400. If the job contained four unit ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate