Acquisition of a distressed property

Assignment Help Finance Basics
Reference no: EM131872222

An investor is considering the acquisition of a "distressed property" which is on Northwood Bank's REO list. The property is available for $200,000 and the investor estimates that he can borrow $170,000 at 9 percent interest and that the property will require the following total average monthly expenditures of $2,450.

a. The investor is wondering what such property must sell for after one year in order to earn ar return of 22 percent return (IRR) on equity?

b. What other issues must be consider in this analysis?

Reference no: EM131872222

Questions Cloud

Write two pages about accounting problems in any company : Write two pages about accounting problems in any company and how they solve it from newspaper websites
Oberon before-tax component cost of debt : What would be Oberon's before-tax component cost of debt? (Round your answer to 2 decimal places.)
Compute dow earnings per share for the year ended : Compute Dow's earnings per share for the year ended December 31, 2016.
Discuss a theme of the work illustrated in the quote : Identify work and author; Discuss a theme of the work illustrated in the quote; Relate the quote to the time period in which it was written.
Acquisition of a distressed property : An investor is considering the acquisition of a "distressed property" which is on Northwood Bank's REO list. The property is available for $200,000
Find a recent aricle from an online business newspaper : Search for a recent article (within 6 months) related to the topic of the week in an online business newspaper or business magazine of your choice.
The estimated required rate of return : the estimated required rate of return on Telus stock is 8.9 percent.
Floating-rate loans : The Bensington Glass Company entered into a loan agreement with the? firm's bank to finance the? firm's working capital.
What is the value of usc common stock today : If investors in companies of similar risk require a 12.0% rate of return, what is the value of USC common stock today?

Reviews

Write a Review

Finance Basics Questions & Answers

  Lisa is offered an investment that will pay her 700 every

lisa is offered an investment that will pay her 700 every year forever starting 8 years from now. lisa requires a

  Calculate the nominal annual cost of non free trade credit

calculate the nominal annual cost of non free trade credit under each of the following terms. assume payment is made

  At the current time warren industries can issue 15-year

at the current time warren industries can issue 15-year 1000 par-value bonds paying annual interest at a 12 coupon

  What is the expected return of your portfolio

What is the expected return of your portfolio if Cathy, Joy, and Sally have expected returns of 0.070, 0.150, and 0.150, respectfully? Note: write your answer to 3 decimal places.

  Kathy snow wishes to purchase shares of countdown computing

1. Kathy Snow wishes to purchase shares of countdown computing, Inc. The company's board of directors has declared a cash dividend of $0.72 to be paid holders of record on Wednesday, Sep. 21.a. What day does this stock begin trading ex dividend?b. Wh..

  What is the minimum price at which garage should sell car

A garage has an old car that it bought several months ago for £3,000. The car needs a replacement engine before it can be sold. It is possible to buy a reconditioned engine for £300. This would take seven hours to fit by a mechanic who is paid £12..

  Alaska north slope crude oil

Assuming you currently have 10,000 Bbls of WTI crude, the added benefit (cost) to you if you were to sell the 10,000 Bbls of WTI crude and use the proceeds to purchase and refine ANS crude is closest to:

  Analyzing capital expenditures

Assume that you have received a capital expenditure request for $52,000 for plant equipment and that you are required to do a justification analysis using capital budgeting techniques.

  Importance of coordination between marketing and finance

In looking at Euro Disney and its "Mickey Mouse" financial performance early on, note that the subsequent actions taken amount to a product reformulation.

  Forward and future contracts to hedge

Create a scenario where an investor would benefit from using forward and future contracts to hedge an existing risk exposure.

  What is the interest payment due in month

What is the interest payment due in month 30 of on a fixed rate mortgage that has an annual interest rate of 5% and an initial principal value of $200,000? (a) $802 (b) $402 (c) $602 (d) $500

  How much must she save each year at the end of years

How much must she save each year at the end of years 21 through 35 to obtain her goal? Assume that the average rate of return over the entire period will be 10%. Please show all work.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd