User Account

All Pages

Calculate the present value of the lease

Assignment Help Finance Basics
Reference no: EM132484752

You have just leased a property to a tenant; the lease is 8 years with beginning of month payments locked in for the first 5 years. Payments will increase for the last 3 year term. Market rates are anticipated to remain constant for the first 4 years, with a decrease for the remaining term. Based on information provided below, calculate the present value of the lease, from your perspective.

Year 1-5 lease rate $1,100 per month

Year 6-8 lease rate $1,550 per month

Mkt rate: Year 1-4 $1,200 per month

Mkt rate: Year 5-8 $1,300 per month

Owner's I/YR 12% compounded monthly

Tenant's I/YR 14% compounded monthly

Value of property (at end of lease term)

-land & bldg. $600,000

Reference no: EM132484752

Questions Cloud

What is the weighted average cost of capital : What is the weighted average cost of capital for each company? Which company will have a lower stock price? Two public companies (Jack Co. and Jill Co.) operate
Why are initial public offerings considered overprice : Briefly, why are initial public offerings (IPOs) considered overpriced?
What would be the dollar value of positions : What would be the dollar value of your positions in X, Y, and the T-bills, respectively, if you decide to hold a portfolio that has an expected outcome of $1,20
Calculate the depreciation for the straight-line method : Calculate the depreciation for 2019 and 2020 using The straight-line method. Usage method (kms.). Double-declining balance method.
Calculate the present value of the lease : Based on information provided below, calculate the present value of the lease, from your perspective.
Determine price of a 3-year european put option : Determine price of a 3-year European put option with a $30 strike price. The annual discount rate is 3% (compounded annuallu), the current price of the stock
What motivated you to perform at your best : Think about a time when you were at your best at work or in school. What motivated you to perform at your best? Were you motivated by extrinsic or intrinsic.
What is the amount of shareholders equity at the end of year : If Xul's total assets decreased by $90,000 during the year and shareholders' equity increased by $120,000, what is the amount of total liabilities at end year
How you would apply systematic steps toward a resolution : Discuss how you would apply systematic steps toward a resolution of the dilemma as a consultant hired by Wells Fargo. Discuss the specific steps of the decision

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the fundamental difference between a sensitivity

what is the fundamental difference between a sensitivity analysis and a scenario

  Determine dividend payout ratio

Earnings per share of common stock will immediately increase as a result of, An increase in the market price of a company's common stock will immediately affect its:

  The company expects the project to generate 30000 per year

consider a project that requires a company to invest 100000 today. the company expects the project to generate 30000

  Identify and describe a case in which an employers

use the library and other web resources to complete the followingidentify and describe a case in which an employers

  You have arranged to finance the remainder with a 30-year

suppose you are buying your first condo for 145000 and you will make a 15000 down payment. you have arranged to finance

  What is the break-even ebit

What is the break-even EBIT? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, i.e. 1,234,567.)

  At what price would the bonds sell

Suppose Hillard Manufacturing sold an issue of bonds with a 10-year maturity, a $1,000 par value, a 10% coupon rate, and semiannual interest payments.

  Calculate the expected returns on the stock market

Calculate the expected returns on the stock market and on Chicago Gear stock. What is Chicago Gear's beta? What is Chicago Gear's required return according to the CAPM?

  How much in dividends was paid to shareholders

In its most recent financial statements, ABC Inc. reported $35 of net income and $706 of retained earnings. The previous retained earnings were $824. How much in dividends was paid to shareholders during the year?

  Calculate the net profit margin and the sales to total asset

Calculate the net profit margin and the sales-to-total-assets ratio for Salza for 2010 using average total assets. Also calculate the return on total assets in 2010 using average total assets.

  How much cash will be available to distribute

How much cash will be available to distribute to the existing owners of the MiniDiscs Corporation? What will be the dollar breakdown for Brian Motley, the management team, and the venture capitalists?

  Conduct a hypothesis test using tool

Conduct a hypothesis test using this tool. Explain your answer (how you decided if men spend more or not) and include the output table.

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