User Account

All Pages

Calculate irr and advise

Assignment Help Accounting Basics
Reference no: EM133037283

Question -

a. Your friend is considering buying a property for Sh, 50,000. If purchased the property will be financed 60% by debt at 15% p.a. payable monthly for 5 years. The property will generate NOI of Sh, 5,000 and Sh, 8,000 in year 1 and 2 respectively. The property can be sold for Sh, 60,000 at the end of year 2. The capital gains tax is 10% on price appreciation and 20% on depreciation recapture. No tax on current income. The required rate of return is 25%. Calculate IRR and advise. (Show your workings)

b. Under what circumstance will the following alternatives to property disposition make sense: (i) Refinancing and (ii) Renovation.

Reference no: EM133037283

Questions Cloud

Determine the? project npv : This project would require an initial cash outlay of ?$5,500,000. Determine the? project's NPV using a discount rate of 5 percent
What are the five principles of finance : What are the five principles of finance? Discuss each one and explain which principle is the most significant.
Analytic decision-making techniques : Undergrad University to employ analytic decision-making techniques to increase student enrollment by 20% over a four-year period
Company internal customer relationships : Discuss a service breakdown with a company you dealt with at one time or another. Describe how well emotions (client vs. service rep) were handled in the proces
Calculate irr and advise : The property will generate NOI of Sh, 5,000 and Sh, 8,000 in year 1 and 2 respectively. Calculate IRR and advise
Core characteristics of great creative minds : Relate the characteristics to the positive and negative repercussions in the lives of people who demonstrate extreme levels of creativity.
How much interest is included in the future value : How much interest is included in the future value of an ordinary simple annuity of $800 paid every six months at 4% compounded semi-annually
Changes of paramount importance : Businesses use information systems at all levels of operation to collect, process, and store data. Management aggregates and disseminates this data in the form
Compute the book value per share for the preference share : Compute the book value per share for the Preference share assuming dividends are in arrears for 3 years including the current year

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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