Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Ben Ryatt, professor of languages at a southern university, owns a small office building adjacent to the university campus. He acquired the property 12 years ago at a total cost of $560,000-$52,000 for the land and $508,000 for the building. He has just received an offer from a realty company that wants to purchase the property; however, the property has been a good source of income over the years, so Professor Ryatt is unsure whether he should keep it or sell it. His alternatives are:
Keep the property. Professor Ryatt's accountant has kept careful records of the income realized from the property over the past 10 years. These records indicate the following annual revenues and expenses:
Professor Ryatt makes a $12,600 mortgage payment each year on the property. The mortgage will be paid off in 10 more years. He has been depreciating the building by the straight-line method, assuming a salvage value of $9,600 for the building, which he still thinks is an appropriate figure. He feels sure that the building can be rented for another 16 years. He also feels sure that 16 years from now the land will be worth 2.5 times what he paid for it.
Sell the property. A realty company has offered to purchase the property by paying $150,000 immediately and $23,000 per year for the next 16 years. Control of the property would go to the realty company immediately. To sell the property, Professor Ryatt would need to pay the mortgage off, which could be done by making a lump-sum payment of $71,000. Professor Ryatt requires a 14% rate of return. (Ignore income taxes.)
Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using tables.
Calculate the net present value of cash flows using total cost approach if he keeps the property.(Negative amount should be indicated by a minus sign. Round discount factor(s) to 3 decimal places, intermediate and final answers to the nearest dollar amount. Omit the "$" sign in your response.)
Calculate the net present value of cash flows using total cost approach if he sells the property.(Negative amount should be indicated by a minus sign. Round discount factor(s) to 3 decimal places, intermediate and final answers to the nearest dollar amount. Omit the "$" sign in your response.)
Prepare the sales revenues section of the income statement based on this information.
assume that muhammed corporation has a contractual debt outstanding.muhammed has available two means of settlement it
Fields Corporation has two divisions; Sporting Goods and Sports Gear. The sales mix is 65% for Sporting Goods and 35% for Sports Gear. Fields incurs $2,220,000 in fixed costs. The contribution margin ratio for Sporting Goods is 30%, while for Spor..
hennings travel company specializes in the production of travel items clocks personal care kits. the following data
During the current period, Department A finished and transferred 50,000 units to Department B. Of the 50,000 units, 20,000 were 1/5 complete at the beginning of the period and 30,000 were started and completed during the period.
based on the scenario and the knowledge gained from this section address the followingdevelop an argument for why a
Allen (age 32) takes a distribution of $20,000 from his Traditional IRA account which he plans to deposit into an IRA with a different bank. During the 60-day rollover period, he gambles and loses the entire IRA balance. What income and/or penalti..
holly inc reports warranty expense when related products are sold. for tax purposes the warranty costs are deductible
Total 2008 gift of life insurance policy is 72,000. annual exclusions are 24,000 (two donees at 12,00). Current taxable gifts equal 48,000.
Prepare the Income Statement for the period ending December 31, 20##.
what is future development along with the harmonization efforts of fasb and iasb on investment? please provide detail
assess the short- and long-term impact the disaster had to the business and stakeholders. Provide specific examples to support your response.
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd