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

Asignmentthe regal cycle company manufactures three types

Asignment The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow:   Total Dirt Bikes Mountain Bikes Racing Bik ...

Assignmentbullnote some of the assessments in this course

Assignment • Note: Some of the assessments in this course build upon each other, so you are strongly encouraged to complete them in the order in which they are presented. For this assessment, you may use Word or Excel to ...

Research case-comparing financial reporting objectives gasb

Research Case-Comparing Financial Reporting Objectives. GASB Concepts Statement No. 1, "Objectives of Financial Reporting," states that "Accountability is the cornerstone of all financial reporting in government." FASB S ...

How strong a factor is ethnocentrism in war-torn regions of

How strong a factor is ethnocentrism in war-torn regions of the world, including Northern Ireland, the Middle East, northern India, central Africa, and the Balkans? Is the trend toward a global economy threatened by ethn ...

1 bloomington inc exchanged land for equipment and 3800 in

1. Bloomington Inc. exchanged land for equipment and $3,800 in cash. The book value and the fair value of the land were $104,200 and $89,700, respectively. Bloomington would record equipment and a gain/(loss) of: Equipme ...

Describe a painful disposal situation that you have

Describe a painful disposal situation that you have encountered. What was the result? Would you do it differently if you had it to do over again? How can marketers use the consumer’s reluctance to part with favorite prod ...

On december 31 2009 adams corporation acquired all of the

On December 31, 2009, Adams corporation acquired all of the stock of Baker company. the fair value of Adam's shares used in the exchange was $7,500,000. At the time of acquisition, the book value of Baker's stockholder's ...

Choose one of the following two assignments to complete

Choose one of the following two assignments to complete this week. Do not do both assignments. Identify your assignment choice in the title of your submission. Option #1: Income Statement, Retained Earnings, and Balance ...

Assignemtgammy is considering building a facility to

Assignemt Gammy is considering building a facility to manufacture cupcakes to distribute nationally. Your assignment involves both the calculation of cash flows associated with the new investment under consideration and ...

A progress feedback and normative comparison feedback how

A. Progress feedback and Normative (comparison) feedback. How do these relate to intrinsic motivation? How does one's perception of competence (self-efficacy) or how long they've been doing an activity relate to these co ...

  • 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

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen